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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
 
FORM
10-K
 
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For
the fiscal year ended: March 31, 2024
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission
File Number: 000-56074
 
BIOTRICITY
INC.
(Exact
name of registrant as specified in its charter)
 


nevada
 
30-0983531

(State
                                            or other jurisdiction of
incorporation
    or organization)
 
(I.R.S.
                                            Employer
Identification)

 


203 Redwood Shores Parkway, Suite 600

Redwood
    City, CA 94065

(Address
    of principal executive offices, including zip code)

 


(800)
    590-4155

(Registrant’s
    telephone number, including area code)

 
Securities
registered pursuant to Section 12(b) of the Act: None
 
Securities
registered pursuant to Section 12(b) of the Act:
 


Title
    of Class
 
Trading
    Symbol (s)
 
Name
    of each exchange on which registered

Common
    Stock, Par Value $0.001
 
BTCY
 
Nasdaq
    Capital Market

 
Securities
registered pursuant to Section 12(g) of the Act:
 


Title
    of Each Class
 
Name
    of Each Exchange On Which Registered

N/A
 
N/A

 
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in 405 of the Securities Act. Yes ☐ No ☒
 
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐
No ☒
 
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past90 days. Yes ☒ No ☐
 
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such fi les). Yes ☒ No ☐
 
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 


 
Large
    accelerated filer ☐
Accelerated
    filer ☐

 
Non-accelerated
    filer ☒
Smaller
    Reporting Company ☒

 
 
Emerging
    Growth Company ☐

 
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☒ No ☐
 
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
 
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
 
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
 
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
 
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s
most recently completed second fiscal quarter:  $16,344,389.
 
The
number of shares outstanding of each of the registrant’s classes of common stock, as of June 25, 2024, was 21,484,396 (not including
160,672 Exchangeable Shares, directly exchangeable into an equivalent number of shares of common stock).
 
DOCUMENTS
INCORPORATED BY REFERENCE
 
None.
 

 
 

 
 

 
BIOTRICITY
INC.
Form
10-K
For
the Fiscal Year Ended March 31, 2024
 
TABLE
OF CONTENTS
 


PART I
3

ITEM 1. BUSINESS
3

ITEM 1A. RISK FACTORS
19

ITEM 1B. UNRESOLVED STAFF COMMENTS
36

ITEM 1C. CYBERSECURITY
36

ITEM 2. PROPERTIES
36

ITEM 3. LEGAL PROCEEDINGS
36

ITEM 4. MINE SAFETY DISCLOSURES.
36

 
 

PART II
37

ITEM
    5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY
    SECURITIES
37

ITEM 6. [RESERVED]
39

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
39

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
56

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
56

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
56

ITEM 9A. CONTROLS AND PROCEDURES
56

ITEM 9B. OTHER INFORMATION
57

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
57

 
 

PART III
58

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
58

ITEM 11. EXECUTIVE COMPENSATION
63

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
65

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
66

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
66

 
 

PART IV
67

ITEM
    15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
67

 
 

SIGNATURES
69

 

2
 

 
PART
I
 
ITEM
1. BUSINESS
 
Biotricity Inc. (the “Company”, “Biotricity”, “we”,
“us”, “our”) is a medical technology company focused on biometric data monitoring solutions. Our aim is to deliver
innovative, remote monitoring solutions to the medical, healthcare, and consumer markets, with a focus on diagnostic and post-diagnostic
solutions for lifestyle and chronic illnesses. We approach the diagnostic side of remote patient monitoring by applying innovation within
existing business models where reimbursement is established. We believe this approach reduces the risk associated with traditional medical
device development and accelerates the path to revenue. In post-diagnostic markets, we intend to apply medical grade biometrics to enable
consumers to self-manage, thereby driving patient compliance and reducing healthcare costs. We first focused on a segment of the ambulatory
diagnostic cardiac outpatient market, otherwise known as Mobile Cardiac Outpatient Monitoring (“COM”), while also providing
the capability to perform all types of ambulatory cardiac studies.
 
We
developed our Bioflux® (“Bioflux”) COM technology, which has received clearance from the U.S. Food and Drug Administration
(“FDA”), comprised of a monitoring device and software components, which we made available to the market under limited release
on April 6, 2018, to assess, establish and develop sales processes and market dynamics. Full market release of the Bioflux device for
commercialization occurred in April 2019. The fiscal year ended March 31, 2021 marked our first year of expanded commercialization efforts,
focused on sales growth and expansion. In 2021, we commenced the initial launch of Bioheart, a direct-to-consumer heart monitor
that offers the same continuous heart monitoring technology used by physicians. In addition to developing and receiving regulatory approval
or clearance of other technologies that enhance our ecosystem, in 2022, we announced the launch of our Biocore Cardiac Monitoring Device
(“Biocore”, previously branded as Biotres), a three-lead device for ECG and arrhythmia monitoring intended for lower risk
patients, a much broader addressable market segment. We have since expanded our sales efforts to 35 states, and intend to expand further and compete in the broader US market using an insourcing business model. Our technology has a large potential total
addressable market, which can include hospitals, clinics and physicians’ offices, as well as other Independent Diagnostic Testing
Facilities (“IDTFs)”. We believe our technological and clinical advantage combined with our solution’s insourcing model,
which empowers physicians with state-of-the-art technology and charges technology service fees for its use, has the benefit of a reduced
operating overhead for us, and enables a more efficient market penetration and distribution strategy.
 
We are a technology company focused on earning utilization-based recurring technology fee revenue. Our ability to
grow this type of revenue is predicated on the size and quality of our sales force and their ability to penetrate the market and place
devices with clinically focused, repeat users of its cardiac study technology. We plan to grow our sales force to address new markets
and achieve sales penetration in the markets currently served.
 
Our
principal executive office is located at 203 Redwood Shores Pkwy Suite 600, Redwood City, California, and our telephone number is (800)
590-4155. Our website address is www.biotricity.com. The information on our website is not part of this Annual Report on Form 10-K.
 
Commercial
History
 
Full
market release of the Bioflux COM device for commercialization launched in April 2019, after receiving its second and final required
FDA clearance. To commence commercialization, we ordered device inventory from our FDA-approved manufacturer and hired a small, captive
sales force, with deep experience in cardiac technology sales; we expanded on our limited market release, which identified potential
anchor clients who could be early adopters of our technology. We then expanded our sales force and geographic footprint.
 
In 2021, we received a 510(k) clearance from the FDA for our Bioflux Software II System, engineered to improve workflows and reduce estimated review
time from 5 minutes to 30 seconds. This improvement in review time reduces operational costs and allows us to continue to focus on excellent
customer service and industry-leading response times to physicians and their at-risk patients. Additionally, these advances mean we can
focus our resources on high-level operations and sales.
 

3
 

 
During 2021 and the early
part of 2022, we also commercially launched our Bioheart technology, which is a consumer technology whose development was forged out of
prior the development of the clinical technologies that are already part of our technology ecosystem, the Biosphere. In recognition of
our product development, in November 2022, Bioheart received recognition as one of TIME’s Best Inventions of 2022.
 
The COVID-19 pandemic has
highlighted the importance of telemedicine and remote patient monitoring technologies. We continue to develop a telemedicine platform,
with capabilities of real-time streaming of medical devices. Telemedicine offers patients the ability to communicate directly with their
health care providers without the need of leaving their home. The introduction of a telemedicine solution is intended to align with our
technology platform and facilitate remote visits and remote prescriptions for cardiac diagnostics, but it will also serve as a means of
establishing referral and other synergies across the network of doctors and patients that use the technologies we are building within
the Biotricity ecosystem. We intend to continue to provide improved care to patients that may otherwise elect not to go to medical
facilities and continue to provide economic benefits and costs savings to healthcare service providers and payers that reimburse. Our
goal is to position ourselves as an all-in-one cardiac diagnostic and disease management solution. We continue to grow our data set of
billions of patient heartbeats, allowing us to further develop our predictive capabilities relative to atrial fibrillation and arrythmias.
 
In January 2022, we received the 510(k) FDA clearance of our Biocore (previously named Biotres) patch solution, which is a novel
product in the field of Holter monitoring. This three-lead technology can provide connected Holter monitoring that is designed to
produce more accurate arrythmia detection than is typical of competing remote patient monitoring solutions. It is also foundational,
since already developed improvements to this technology will follow which are not known by us to be currently available in the
market, for clinical and consumer patch solution applications. In October 2023, we launched the cellular version of this device, the
Biocore Pro.
 
In October 2022, we launched
Biocare, after successfully piloting this technology in two facilities that provide cardiac care to more than 60,000 patients. This technology
and other consumer technologies and applications such as the Biokit and Biocare have been developed to allow us to transform and use our
strong cardiac footprint to expand into remote chronic care management solutions that will be part of the Biosphere. The technology puts
actionable data into the hands of physicians to assist them in making effective treatment decisions quickly. During March 2023, we launched
our patient-facing Biocare app on Android and Apple app stores. This further allows us to expand our footprint in providing full-cycle
chronic care management solutions to our clinic and patient network. In January 2024, we appointed Dr. Fareeha Siddiqui, a scientist and
expert in community health and diagnostics, to the position of VP of Healthcare to spearhead the roll-out and Biocare adoption to existing
and new customers.
 
We are also developing several
other ancillary technologies, which will require application for further FDA clearances, which we anticipate applying for within the next
twelve months. Among these are:
 


 
●
advanced ECG algorithms and analysis software for further improvements in sensitivity and specificity to analyze and synthesize patient ECG monitoring data with the purpose of distilling it down to the important information that requires clinical intervention, while reducing the amount of human intervention necessary in the process;

 
 
 

 
●
the Biocore® 2.0, which is the next generation of our award winning Biocore®

 
We identified the importance
of recent developments in accelerating our path to profitability, including the launch of important new products identified, which have
a ready market through cross-selling to existing large customer clinics, and large new distribution partnerships that allow us to sell
into large hospital networks.
 
Additionally, in September
2022, we were awarded a NIH Grant from the National Heart, Blood, and Lung Institute for AI-Enabled real-time monitoring, and predictive
analytics for stroke due to chronic kidney failure. This is a significant achievement that broadens our technology platform’s disease
space demographic. The grant focuses on Bioflux-AI as an innovative system for real-time monitoring and prediction of stroke episodes
in chronic kidney disease patients. We received $238,703 under this award in March 2023, which we used to defray research and development
and other associated costs.
 


4
 

 
 Our mission is to innovate and create
transformative healthcare products while ensuring financial discipline, to drive margin and revenue growth to deliver value creation
for our investors. Our commitment to innovation means that we harness data intelligently to explore novel avenues for enhancing
healthcare outcomes. Through cutting-edge research and development, we believe we are redefining medical diagnostics and patient
care and innovating new AI-driven solutions.
 
As a result of providing
our Bioflux and Biocore products, Biotricity has monitored well over two billion heartbeats for atrial fibrillation (afib), a leading
cause of strokes. Over the past two years, these efforts have benefited over 28,000 patients diagnosed with afib, by providing them with
the prospect of earlier medical intervention – which also produces significant healthcare savings to patients and the healthcare
system.
 
We are expanding our AI technology development in remote cardiac care, leveraging proprietary AI technology to provide a suite of predictive
monitoring tools to enhance new disease profiling, improve patient management, and revolutionize the healthcare industry for disease prevention.
 
We have also strengthened
relationships with Amazon and Google. The healthcare AI market opportunity is projected to grow to $208.2 billion by 2030 according to
Grand View Research. We have already established a strong foothold, having already built a powerful proprietary cardiac AI model that
combines Google’s TensorFlow, AWS infrastructure, big data and a continuous learning engine. This combination allows us to rapidly
improve our cardiac technology. In the near future, we believe the capabilities of our cardiac AI model will allow us to support healthcare
professionals in handling exponentially more patients while identifying the most critical data. This will enable healthcare workers to
elevate the quality of care while serving a larger number of patients. As growing patient numbers further stress the shortage of healthcare
professionals, our technology could help alleviate this pressing issue. We have engineered our technology to not only improve patient
care and outcomes, but to do so in a manner that supports more patients. This has led to increasing sales of our remote cardiac monitoring
devices and the ramp-up of our subscription-based service, increasing our recurring revenue over the past few quarters and charting a
clear path to profitability.
 
From a market perspective,
increasing interest and demand continue to drive the adoption of our suite of products, which are focused on chronic cardiac disease prevention
and management. Our efforts in commercialization and development have yielded tremendous progress in remote monitoring solutions for diagnostic
and post-diagnostic products.
 
Market
Overview
 
Chronic
diseases are the number one burden on the healthcare system, driving up costs year over year. Lifestyle related illnesses such as obesity
and hypertension are the top contributing factors of chronic conditions including diabetes and heart disease. Government and healthcare
organizations are focused on driving costs down by shifting to evidence-based healthcare where individuals, especially those suffering
from chronic illnesses, engage in self-management. This has led to growth in the connected health market, which according to an October
2023 report by MarketUs is projected to reach $150 billion by 2024 at a compound annual growth rate (CAGR) of 25%.
 
According
to the American Heart Association, the number one cost to the healthcare system is cardiovascular disease, estimated by the CDC Foundation
to be responsible for 1 in every 6 healthcare dollars spent in the US. Since cardiovascular disease is the number one cause of death
worldwide, early detection, diagnosis, and management of chronic cardiac conditions are necessary to relieve the increasing burden on
the healthcare infrastructure. Diagnostic tests such as ECGs are used to detect, diagnose and track certain types of cardiovascular conditions.
We believe that the rise of lifestyle related illnesses associated with heart disease has created a need to develop cost-effective diagnostic
solutions to fill a hole in the current ECG market. These solutions will not only deliver faster and earlier diagnoses but also build
the foundation for disease management, supporting the transition from diagnosis to disease management.
 
A
report by Grand View Research projects that the global ECG equipment market will grow at a CAGR of 6.5% from 2023 to 2030, with the US
market valued at $2.01 billion in 2022. The factors driving this market include an aging population, an increase in chronic diseases
related to lifestyle choices, improved technology in diagnostic ECG devices, and high growth rates of ECG device sales.
 
In the US, COM tests are primarily conducted through outsourced IDTFs that
are reimbursed at an estimated average rate of approximately $850 per diagnostic test, based on pricing information provided by the Centers
for Medicare & Medicaid Services, a part of the U.S. Department of Health and Human Services, and weighted towards the largest markets
of New York, California, Texas and Florida. Reimbursement rates can be lower in smaller markets, although the national average is $801.
Further, we believe private insurers provide for similar or better reimbursement rates.
 
Our
initial device offerings intended to revolutionize the COM and Holter markets by providing convenient, cost-effective, integrated solutions,
inclusive of both software and hardware for physician providers and their patients. Biotricity, however, has a broader strategic vision
to offer an ecosystem of technologies that engage the patient-user and their medical practitioner(s) in sustained monitoring, diagnosis,
communication and pro-active treatment and management of chronic care conditions. Our core solution is designed as a platform to encompass
multiple segments of the remote monitoring market, and its future growth.
 


5
 

 
Market
Opportunity
 
Cardiac
Diagnostics
 
ECGs
are a key diagnostic test utilized in the diagnosis of cardiovascular disease, the number one cause of death worldwide. The American
Heart Association reported that there were approximately 128 million adults in the US living with cardiovascular disease in 2020.
 
The
US ECG market is divided into three major product segments:
 


 
1.
Event
    monitoring systems;

 
2.
Stress
    ECG systems; and

 
3.
Resting
    (non-stress) ECG systems.

 
Event
monitoring systems are projected to grow the fastest due to a shift from in-hospital/clinic monitoring to outpatient monitoring. This
shift is expected to help reduce health care costs by limiting the number of overnight hospital stays for patient monitoring. We believe
that physicians prefer event monitoring systems over resting and stress ECG systems because they provide better insight to the patient’s
condition for diagnostic purposes.
 
The event monitoring market is divided into the Holter/Extended Holter,
Event Loop and COM product segments, of which Holter, and its variant Extended Holter, and Event Loop are the current market leaders.
Among event monitoring systems, we believe that the preferred choice of physicians and cardiologists is COM, because of its ability to
continuously analyze patient data and transmit, thereby speeding up diagnoses. COM devices have built-in arrhythmia analysis and regular
communication, which allow physicians to prescribe the device for a longer period of time; thereby enabling prolonged data collection
and delivering a more complete picture for diagnosis.
 
Typical
Holter/Extended Holter and Event Loop solutions lack the ability to alert the patient or provider in case of an anomaly. Holters are
typically used as a short-term solution, up to 3 days, whereas Event Loop is used for up to 30 days. Extended Holter, the long-term variant
of Holter can be used for up to 21 days. It is the most recent of the cardiac monitoring options and was created for longer term holter
recordings. Since Event Loop is also long term, reimbursement for Extended Holter and Event Loop are converging. Reimbursement for these
is much lower compared to COM due to the nature of the solution, recording vs monitoring. With Holter and Event Loop monitoring, ECG
data is not uploaded or transmitted regularly. Comparatively, if the patient were monitored through a COM device with regular ECG data
transfer and cellular connectivity, then in the event of cardiac anomalies, the monitoring center could send communication to the patient’s
physician.
 
Since
COM requires an FDA-cleared device (meaning for our purposes that it can be used to review medical ECG data from ECG devices), FDA-cleared
ECG reporting software, and remote monitoring capabilities, regulatory and development hurdles have resulted in relatively few companies
being able to successfully develop an all-encompassing solution. We believe that there are currently only 5 COM solutions within the
market. Some of these solutions are sold to the market through solutions providers that have not developed and do not manufacture their
own device.
 


6
 

 
Of
the COM systems currently available in the market, most are IDTFs who employ an outsourcing business model, focused on providing clinical
services for which they can earn reimbursement; this means that they would typically not sell their devices to physicians, but offer
their clinical services. Some COM providers choose to sell their solution by charging high prices for devices and upfront software costs,
as well as a per cardiac study monitoring fee. Among these are solutions that are not scalable; some lack monitoring software, requiring
a customer to acquire third party software and incur integration expenses. These would require an investment by the physician, to incur
upfront costs that would take time to recoup before profits are realized.
 
The
limited number of competitors makes this an attractive market for new entrants. However, entry into the market requires a hardware device
coupled with complex algorithms, ECG software and access to a monitoring center. Two of the five COM players have done so by building
their own monitoring infrastructure, developing their own ECG software and utilizing TZ Medical’s COM device. However, this is
capital intensive and we believe cost prohibitive for most hospitals and clinics. These barriers are in our opinion among the key reasons
as to why Holter and Event Loop have maintained a significant portion of the US event monitoring market despite the increase in patient
safety and improved outcomes with COM.
 
The
Bioflux solution and business model attempts to address these complications with its complete, turn-key solution for providers to
deliver cardiac diagnostics directly. Technologically, the Bioflux solution is superior as a one-piece solution as opposed to a
two-piece and collects 3 channels of ECG compared with 1 or 2, resulting in better data and higher quality diagnoses. Combined with
our insourced business model, providers can deliver better and faster care while also billing. This combination has lead to our
continued growth and high customer retention rates.
 
Chronic
Care and Remote Patient Monitoring
 
Chronic
diseases are the number one healthcare expense and are continuing to grow as the population ages. Lifestyle related illnesses such as
obesity, hypertension, cardiovascular diseases, and diabetes are the top contributing factors of chronic conditions. Government and healthcare
organizations are focused on driving costs down by shifting to holistic management where individuals, especially those suffering from
chronic illnesses, are supported outside of the clinic. This has led to growth in chronic care management market, which is projected
to reach $8.7 billion in the US by 2027 at a compound annual growth rate (CAGR) of 18% between 2021 and 2027, according to a January
2022 report by Precedence Research.
 
Remote
patient monitoring (RPM), one of the key areas of focus for disease-management and evidence-based practice, is projected by Research
and Markets to reach a market size of $96.67 billion by 2030 at a CAGR of 17.6%, according to a January 2024 report by Research and Markets.
Today, approximately 20% of large healthcare facilities in the US are already using remote monitoring with a projected 70 million US
patients utilizing remote monitoring by 2025, as reported by Strategic Market Research in July 2023.
 
Similar
to chronic care and RPM, lifestyle management is seeing increasing growth where stable patients are becoming more and more engaged in
lifestyle management. Grand View Research reported that the global wearable technology market has already reached $61.3 billion in 2022
with an expected CAGR of 14.6% from 2023 to 2030. In 2021, the US portion of that market was valued at $17.9 billion.
 
The primary driver of each of these markets are individuals diagnosed with
or at risk-for chronic conditions. Cardiac diseases are the number one expense and the number one killer, making up the bulk of the individuals
utilizing such solutions. Despite this, existing solutions are not tailored for cardiac patients but for diabetes, obesity, and hypertension
as these conditions are supported by medical or personal devices that can track biometrics that support management. Up until now, there
has been no solution available to support cardiac patients as technology was limited to manual short term heart rhythm collection or heart
rate monitors.
 


7
 

 
Biotricity
changed this with the creation of Bioheart and Biocare, which delivers the first cardiac tailored solution for disease management. The
engine of this solution is the Bioheart, the first-of-its-kind continuous heart rhythm monitor that autonomously and continuously collect
heart rhythm data with no limitation on duration, a necessity for cardiac issues. Just as diabetic patients have continuous glucose monitoring,
individuals with cardiac issues now have continuous heart monitoring.
 
Combining
our technological innovation with our business model delivers a solution that is not only industry leading technologically and clinically,
but one that also supports providers to deliver better care while creating a new revenue stream. We believe this leap in innovation will
help us compete with the more generic solutions as well as those limited by shorter duration data collection. The leap in innovation
created by Bioheart was also recognized by TIME, where they named Bioheart one of the Best Inventions of the World in 2022.
 
Market
Strategy
 
Cardiac
Diagnostics
 
Our
cardiac diagnostics strategy is focused on the target addressable market of approximately 34,000 cardiologist physician offices in the
U.S. (approximately 6% of all specialty physician offices in the U.S.), approximately 780 hospitals that specialize in cardiology, heart
and vascular surgery (approximately 13% of all hospitals in the U.S.), and 300 IDTFs that provide cardiac monitoring services (an estimated
10% of all IDTFs in the U.S.). To do this, we invested in the hiring of top caliber sales professionals with a proven track record in
cardiac technology and device sales, and strong business relationships with providers of cardiac medical services. To further expand
our market reach, we have partnered with leading distributors and GPOs.
 
COM
 
The
Bioflux solution is deployed into physicians’ offices, clinics, hospitals, and IDTFs. For the prescribing physician, the COM diagnostic
read is a reimbursable service from payers such as Medicare and insurance companies. In the United States, billing codes for an COM diagnostic
read are available under the American Medical Association Current Procedural Terminal, with a current average reimbursement rate of $850
per read (a read is between 1 and 30 days long).
 
We
believe that Bioflux’s revenue model, which is a platform or technology as a service model (PAAS or TAAS),
is a significant and disruptive departure from the pricing and reimbursement strategies of the existing competitors in the COM market,
which apply an outsourced model to COM diagnostics, where the entire procedure and reimbursement is outsourced; the COM solutions provider
takes over the clinical responsibilities and earns the reimbursement and pays the physician a small administrative stipend. Bioflux’s
technology, revenue and insourced business model entail differentiators that are expected to create barriers to entry for other competitors
seeking to emulate our strategy.
 
We
also believe the Bioflux solution is not only financially superior but also clinically superior. Existing COM solutions are two-piece
solutions with 2 channel ECGs. Comparatively, Bioflux is a one-piece solution with 3 channels of ECG, delivering more and higher quality
data with better patient compliance. This is a significant barrier to entry for existing and new competitors as they would need to develop
an entirely new solution that encompasses multiple channels and integrated cellular connectivity to compete with the Bioflux.
 


8
 

 
Holter/Extended
Holter
 
The
Biocore solution is purpose-built for the holter and extended holter market and is deployed into physicians’ offices, clinics,
hospitals, and IDTFs. For the prescribing physician, the Holter/Extended Holter diagnostic read is a reimbursable service from payers
such as Medicare and insurance companies. In the United States, billing codes for a Holter and Extended Holter diagnostics are available
under the American Medical Association Current Procedural Terminal, with a current blended average reimbursement rate of $200 per test,
where a test is between 1 and 21 days long.
 
We
believe that Biocore’s revenue model, which is a platform or technology as a service model (PAAS or TAAS),
is a significant and disruptive departure from the pricing and reimbursement strategies of the existing competitors in the Holter market,
which apply an outsourced model to Holter diagnostics, where the entire procedure and reimbursement is outsourced; the Holter solutions
provider takes over the clinical responsibilities and earns the reimbursement and pays the physician a small administrative stipend.
Biocore’s technology, revenue and insourced business model entail differentiators that are expected to create barriers to entry
for other competitors seeking to emulate our strategy.
 
Additionally, we believe the Biocore solution is not only financially superior
but also clinically superior. Existing holter patch solutions are 1 channel devices that lack connectivity. This leads to cardiac diagnostic
results taking up to 2 weeks. Biocore is a connected 3 channel patch solution, delivering more and higher quality data while reducing
the time to diagnosis from 2 weeks to 3 days or less. This is a significant barrier to entry for existing and new competitors as they
would need to develop an entirely new solution that encompasses connectivity and multiple channels to compete with the Biocore.
 
Chronic
Care Management (CCM) and Remote Patient Monitoring (RPM)
 
Our chronic care management and remote patient monitoring strategy is focused
on the same target addressable market of approximately 34,000 cardiologist physician offices (approximately 6% of all physician offices
in the U.S.), approximately 780 hospitals that specialize in cardiology, heart and vascular surgery (approximately 13% of all hospitals
in the U.S.), and 300 IDTFs that provide cardiac monitoring services (an estimated 10% of all IDTFs in the U.S.) that we are targeting
for our diagnostics. The difference in our strategy here is a focus on selling into existing accounts and new diagnostic accounts as opposed
to building out a new channel strategy. These solutions are complementary to our diagnostics solution and can be sold as part of a complete
platform to target new and existing customers.
 
Product
and Technology
 
Bioflux
 
Bioflux
is an advanced, integrated ECG device and software solution for the COM market. The Bioflux device is comprised of a wet electrode and
worn on a belt clip around the waist. The Bioflux ECG reporting software will allow doctors and labs to view a patient’s ECG data
for monitoring and diagnostic purposes.
 
The
Bioflux device has been developed, among other things, with the following features:
 


 
●
3
    channels

 
●
Built-in
    cellular connectivity for global cellular network compatibility;

 
●
Extended
    battery size for up to48 hours of battery life.

 
The
Bioflux platform has a built-in cellular chipset and a real-time embedded operating system which allows for our technology to be utilized
as an Internet of Things (IoT) platform. This technology can be leveraged into other applications and industries by utilizing the platform
and OS side of Bioflux.
 

9
 

 
Biocore
 
Holter and Extended Holter monitors are significantly simplified versions
of cardiac diagnostics that lack connectivity and analysis. Holter and Extended Holter monitors require data to be downloaded manually,
resulting in diagnostic results taking up to 2 weeks or longer. The Biocore device has been designed to address the limitations of existing
solutions while providing the same disruptive business model as the Bioflux. Responding to our customer needs, the Biocore was developed
with the following features:
 


 
●
3
    channels

 
●
Connectivity

 
●
Rechargeable

 
●
Reusable

 
The Biocore is also a platform technology that can be leveraged and used
to enter other markets and support future product enhancements. The company has already developed a number of enhancements for Biocore
that will be available in the next generation of the solution.
 
Biocare,
Bioheart and Biokit
 
It
is widely reported that chronic illnesses related to lifestyle diseases are on the rise, resulting in increased healthcare costs. This
has caused a major shift in the US healthcare market, emphasizing a need for evidence-based healthcare system focused on overall health
outcomes. Patient compliance is a critical component in driving improved health outcomes, where the patient adheres to and implements
their physician’s recommendation. Unfortunately, poor patient compliance is one of the most pressing issues in the healthcare market.
One of the key contributing factors to this is the lack of a feedback mechanism to measure improvement and knowledge. Studies show that
poor patient compliance costs the US healthcare system $100 to $289 billion annually1, representing 3% to 10% of total US
healthcare costs2 . Studies have proven that regular monitoring of chronic care conditions improves patient outcomes in the
form of lower morbidity rates and reduce the financial burden on the healthcare system by empowering preventative care.
 
The
Company has developed Biocare to support medical practitioners as they gather data and regularly monitor and treat patients with two
or more chronic care conditions. We expect that Bioheart combined with our Biocare platform, our fourth product, is focused on filling
this need by providing a clinically relevant, preventative care and disease management solution for the consumer. A key underlying component
of Bioheart is the ability to measure patient improvements—with clinical accuracy—helping to drive feedback and support patient
compliance. This approach is implemented in our development process by focusing on a disease/chronic illness profile, as opposed to a
customer profile. We are focused on cardiovascular disease for our first preventative care solution since Bioflux is aimed at the same
health segment.
 
The
focus on cardiovascular disease states make the combination of Bioheart and Biocare a unique offering within the chronic care management
space which is primarily focused on diabetes. With no long term consumer solution for heart patients, chronic care management has focused
on those conditions that do have personal devices, mainly diabetes, hypertension, and COPD. This is why we developed Bioheart, a consumer
solution for personal use for individuals with cardiac issues. Combined with our Biocare platform, it is one of the first disease management
solutions capable of delivering holistic chronic care management to cardiovascular patients.
 
Taking
it a step further, we developed Biokit to support cardiac patients that had other chronic conditions such as hypertension or COPD. Biokit
is a remote patient monitoring kit that combines a blood pressure cuff, an pulse oximeter and a digital thermometer into the Biocare
platform to support the collection of additional biometrics for those patients with multiple conditions. Biocare was developed with the
following features:
 


 
●
Integration
with cardiac diagnostics: Bioflux and Biocore

 
●
Bioheart

 
●
Biokit

 
●
Virtual
    Clinic

 
●
Automated
    biometric reporting

 

10
 

 


 
●
Patient
    Dashboards

 
●
Automated
    time tracking

 
●
Built-in
    patient reminders and calling

 
●
Asynchronous
    chat

 
●
Monthly
    data summaries

 
Biocare
is also a platform technology that can be leveraged and used to enter other chronic condition markets and support future product enhancements.
The company has already developed a number of enhancements for Biocare that will be available in the next generation of the solution.
 
Future
Markets
 
In
the next few years, we intend to expand use of our technology platform with medical-grade solutions for the monitoring of blood pressure,
diabetes, sleep apnea, chronic pain, as well as fetal monitoring, and other adjacent healthcare and lifestyle markets.
 
Bionatal
is a proposed product for monitoring fetus’ health by remote cardiac telemetry. In the US, there were approximately 24,073 fetal
deaths at 20 or more weeks gestation in 20123. The rise of older mothers and mothers with chronic conditions have driven high-risk
pregnancies to a new high; high-risk complications now occur in 6 to 8 percent of all pregnancies4.
 
The
Company has also received an NIH grant to investigate cardiac anomalies in chronic kidney disease patients, which is designed to be a
predictive or early detection tool for CKD patients. This and other new technology that the Company is developing is applicable to the
market segments that the Company intends to serve and will continue to adhere to the Company’s revenue model of deriving income
from technology fees.
 
Competition
 
Cardiac
Diagnostics
 
Cardiac
Outpatient Monitoring
 
The
medical technology equipment industry is characterized by strong competition and rapid technological change. There are a number of companies
developing technologies that are competitive to our existing and proposed products, many of them, when compared to our Company, having
significantly longer operational history and greater financial and other resources.
 
Within
the US event monitoring systems market, we are aware of six main competitors in the COM product segment. These competitors have increased
market presence and distribution primarily by working through existing IDTFs. The existing competitors have maintained a competitive
advantage within the market by controlling the distribution of all available COM devices and software solutions. Our primary competitors
in the COM market are:
 
● Philips Biotel - Biotelemetry (formerly CardioNet), recently acquired by Philips for a reported $2.8B.
We believe that BioTelemetry, Inc. has the largest network of
IDTFs within the COM market. BioTelemetry is considered a complete solution provider as it produces and distributes its own COM device,
software solution, and COM monitoring centers. The company acquired its COM device through the acquisition of a COM manufacturer, Braemar.
Upon acquisition of Braemar, BioTelemetry offered limited support to other clients utilizing Braemar’s technology. This resulted
in BioTelemetry increasing the use of its device and software solution, enabling wide market penetration. We believe that BioTelemetry
business model is focused on providing the COM diagnostic service, as opposed to selling COM solutions to other IDTFs or service providers,
which enables a perpetual per-read fee as opposed to one time device or software sales. Equity research analysts categorize BioTelemetry
as a clinical health provider, because of its business model, rather than as a medical device company. As such, we believe that BioTelemetry
market cap is limited by the low multiples associated with that type of business, and, as a clinical health provider, BioTelemetry has
significant overhead and fixed costs associated with monitoring centers and health professionals.
 

11
 

 
● Boston Scientific – Preventice Preventice (formerly eCardio.), recently acquired by Boston Scientific
for a reported $1.2B. Preventice is a private company, based in Houston, Texas. Preventice’s device is manufactured by a third
party medical device company, TZ Medical. Preventice has integrated TZ Medical’s device with its software solution to create a complete
COM solution. Similar to Biotelemetry, we believe eCardio follows the same business model of offering the COM service and acting as a
clinical health provider.
 
●
ScottCare. ScottCare is a private company in the US and a subsidiary of Scott Fetzer Company, a division of Berkshire Hathaway.
ScottCare provides equipment for cardiovascular clinics and diagnostic technicians. ScottCare has built its own COM device and software
solution, and white-labeled TZ Medical’s device. Unlike the others, ScottCare offers its solution in an insourced model, where
the physician has the opportunity to bill. This model requires the physician to purchase a minimum number of devices at an approximate
average cost of $2,000 and their software at a cost of $25,000 to $40,000. After this initial upfront cost, ScottCare charges an additional
per test fee for monitoring. We believe the above model creates a long return on investment for the physician. In our opinion, this has
resulted in little market penetration for ScottCare as compared to the others.
 
●
Infobionic. Infobionic is a private company located in Waltham, Massachusetts. It follows a leasing model where it leases its
technology at a fixed monthly rate, whether technology is used or not. They have a complete solution, comprised of a device and software.
We believe that they have a good model that will enable them to be competitive in the market. In our opinion, there is room for both
Biotricity and Infobionic within the marketplace, though we believe that our solution is superior in two ways. Firstly, our device has
a screen which allows better patient feedback and improved patient hookup at the clinic. Secondly, our business model is based on usage.
The physician is charged a technology fee when the technology is used. If it is not used, there is no charge. This makes it attractive
compared to Infobionic’s model where the physician is charged even if the technology is not used.
 
In
addition, we note that:
 
●
Medtronic. Medtronic is a major medical device conglomerate. It has an COM solution by the name of SEEQ that was added to their
portfolio through the acquisition of Corventis. We have seen no significant activity or usage with SEEQ in our market analysis. We also
note that SEEQ is a patch based COM solution that only collects data on 1 lead. As such, it has strong competition from 3 lead systems
which are the standard for COM. In early 2018, Medtronic withdrew SEEQ from the marketplace. We do not view Medtronic as a primary competitor,
but, given the size and reach of Medtronic, they are an organization that we must continuously watch and be aware of.
 
●
TZ Medical. TZ Medical is a medical device company that focuses on manufacturing a variety of medical devices. We do not consider
TZ Medical to be a direct competitor as they produce a COM device that is available for purchase, and sold to competitors such as to
Scottcare and Preventice, described above. However, we do not believe that TZ Medical has a software solution, requiring any new entrant
to either acquire or build out a software solution and then integrate that with the TZ Medical device. This creates a requirement for
a large upfront capital investment. As a result, we believe this approach only works for organizations looking to become COM solution
providers with the same business model as the others.
 
We
believe that our Bioflux COM solution will successfully compete because:
 


 
●
it
    is designed as a platform to encompass all segments of the event monitoring market;

 
 
 

 
●
of
    the insourcing business model which we believe is applicable to a significantly larger portion of the total available market and
    enable more efficient strategic penetration and distribution; and

 
 
 

 
●
for
    the other reasons described earlier under “Market Opportunity.”

 

12
 

 
Holter/Extended
Holter
 
Within
the US event monitoring systems market, we are aware of three main competitors in the Holter patch product segment. These competitors
have increased market presence and distribution primarily by working with Hospitals. The existing competitors have maintained a competitive
advantage within the market by a first mover advantage. Our primary competitors in the Holter patch market are:
 


 
●
iRhythm
    Technologies: iRhythm is the leader in holter patch technology with the largest footprint. They are primarily hospital focused and
    operate as an IDTF, much like our COM competitors. Their core product is the Zio patch, which is a 1 channel holter with no connectivity
    and is not rechargeable

 
 
 

 
●
BardyDx
    (Recently Acquired by Hilrom): BardyDx is the second largest player in the holter space. They operate as an IDTF as well.
    Their core product is a 1 channel patch with no connectivity with a removable chip for data uploads. 

 
 
 

 
●
VitalConnect:
    is a small player in the holter space. They have a disposable patch monitor that can be used for a limited time, making it unusable
    for long term studies. They operate as an IDTF. 

 
Cardiac
Disease Management
 
Within
the US cardiac disease management market, we are aware of three main competitors in the cardiac care management segment. These competitors
have different approaches, solutions, and technologies but we still regard them as competitors. Technologically we have a number of differentiators
as we are the only company that has a continuous heart monitor. Our primary competitors in the cardiac disease management market are:
 
Bioheart:
 


 
●
Alivecor
    is a direct to consumer cardiac monitoring company. They are the biggest brand in consumer cardiac care and have a simple to use
    handheld cardiac device. They operate as a service provider, providing cardiac insights direct to individuals. 

 
Biocare:
 


 
●
Optimize
    Health: Optimize health is a chronic care and RPM platform for a variety of chronic conditions. Thought it is platform with no focus
    on cardiac specifically, it provides a complete platform for clinics and hospitals to utilize and build out a chronic disease management
    program. 

 
 
 

 
●
HelloHeart:
    Hello Heart is a disease management program focused on hypertension. It is one of the few disease management programs that is focused
    on a heart related chronic disease

 
In
the digital health space, we have noticed that we have competitors for different products but not a single competitor that has the entire
product portfolio that we have. This adds a layer of differentiation and competitive advantage as customer can deal with one vendor as
opposed to multiple vendors that they have to integrate.
 
Intellectual
Property
 
We
primarily rely on trade secret protection for our proprietary information. No assurance can be given that we can meaningfully protect
our trade secrets. Others may independently develop substantially equivalent confidential and proprietary information or otherwise gain
access to, or disclose, our trade secrets.
 
We
have and generally plan to continue to enter into non-disclosure, confidentiality and intellectual property assignment agreements with
all new employees as a condition of employment. In addition, we intend to also generally enter into confidentiality and non-disclosure
agreements with consultants, manufacturers’ representatives, distributors, suppliers and others to attempt to limit access to,
use and disclosure of our proprietary information. There can be no assurance, however, that these agreements will provide meaningful
protection or adequate remedies for our trade secrets in the event of unauthorized use or disclosure of such information.
 


13
 

 
We
also may from time to time rely on other intellectual property developed or acquired, including patents, technical innovations, laws
of unfair competition and various other licensing agreements to provide our future growth and to build our competitive position. We have
filed an industrial design patent in Canada, and we may decide to file for additional patents as we continue to expand our intellectual
property portfolio. However, we can give no assurance that competitors will not infringe on our patent or other rights or otherwise create
similar or non-infringing competing products that are technically patentable in their own right. We fully intend to vigorously defend
our intellectual property and patents.
 
Currently,
we have a number of registered trademarks; we may obtain additional registrations in the future.
 
Research
and Development
 
Our
research and development programs are generally pursued by engineers and scientists employed by us in California and Toronto on a full-time
basis or hired as per diem consultants or through partnerships with industry leaders in manufacturing and design and researchers and
academia. We are also working with subcontractors in developing specific components of our technologies. In all cases, we ensure that
all areas of IP are owned and controlled by the Company.
 
The
primary objective of our research and development program is to advance the development of our existing and proposed products, to enhance
the commercial value of such products.
 
We
incurred research and development costs of $2.6 million for the fiscal year ended March 31, 2024 and $3.2 million for the fiscal year
ended March 31, 2023.
 
Government
Regulation
 
General
 
Our
medical device products are subject to regulation by the U.S. FDA and various other federal and state agencies, as well as by foreign
governmental agencies. These agencies enforce laws and regulations that govern the development, testing, manufacturing, labeling, advertising,
marketing and distribution, and market surveillance of our medical device products.
 
In
addition to those indicated below, the only other regulations we encounter are regulations that are common to all businesses, such as
employment legislation, implied warranty laws, and environmental, health and safety standards, to the extent applicable. We will also
encounter in the future industry-specific government regulations that would govern our products, if and when developed for commercial
use. It may become the case that other regulatory approvals will be required for the design and manufacture of our products and proposed
products.
 
U.S.
Regulation
 
The
FDA governs the following activities that Biotricity performs, will perform, upon the clearance or approval of its product candidates,
or that are performed on its behalf, to ensure that medical products distributed domestically or exported internationally are safe and
effective for their intended uses:
 


 
●
product
    design, and development;

 
 
 

 
●
product
    safety, testing, labeling and storage;

 
 
 

 
●
record
    keeping procedures; and

 
 
 

 
●
product
    marketing.

 

14
 

 
There
are numerous FDA regulatory requirements governing the approval or clearance and subsequent commercial marketing of Biotricity’s
products. These include:
 


 
●
the
    timely submission of product listing and establishment registration information, along with associated establishment user fees;

 
 
 

 
●
continued
    compliance with the Quality System Regulation, or QSR, which require specification developers and manufacturers, including third-party
    manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures  during all
    aspects of the manufacturing process;

 
 
 

 
●
labeling
    regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;

 
 
 

 
●
clearance
    or approval of product modifications that could significantly affect the safety or effectiveness of the device or that would constitute
    a major change in intended use;

 
 
 

 
●
Medical
    Device Reporting regulations (MDR), which require that manufacturers keep detailed records of investigations or complaints against
    their devices and to report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned
    in a way that would likely cause or contribute to a death or serious injury if it were to recur;

 
 
 

 
●
adequate
    use of the Corrective and Preventive Actions process to identify and correct or prevent significant systemic failures of products
    or processes or in trends which suggest same;

 
 
 

 
●
post-approval
    restrictions or conditions, including post-approval study commitments;

 
 
 

 
●
post-market
    surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness
    data for the device; and

 
 
 

 
●
notices
    of correction or removal and recall regulations.

 
Depending
on the classification of the device, before Biotricity can commercially distribute medical devices in the United States, it had to obtain,
either prior 510(k) clearance, 510(k) de-novo clearance or premarket approval (PMA), from the FDA unless a respective exemption applied.
The FDA classifies medical devices into one of three classes based on the degree of risk associated with each medical device and the
extent of regulatory controls needed to ensure the device’s safety and effectiveness:
 


 
●
Class
    I devices, which are low risk and subject to only general controls (e.g., registration and listing, medical device labeling compliance,
    MDRs, Quality System Regulations, and prohibitions against adulteration and misbranding) and, in some cases, to the 510(k) premarket
    clearance requirements;

 
 
 

 
●
Class
    II devices, which are moderate risk and generally require 510(k) or 510(k) de-novo premarket clearance before they may be commercially
    marketed in the United States as well as general controls and potentially special controls like performance standards or specific
    labeling requirements; and

 
 
 

 
●
Class
    III devices, which are devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable
    devices, or devices deemed not substantially equivalent to a predicate device. Class III devices generally require the submission
    and approval of a PMA supported by clinical trial data.

 

15
 

 
The
custom software and hardware of our products are classified as Class II. Class II devices are those for which general controls alone
are insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient information to establish special
controls. Special controls can include performance standards, post-market surveillance, patient histories and FDA guidance documents.
Premarket review and clearance by the FDA for these devices is generally accomplished through the 510(k) or 510(k) de-novo premarket
notification process. As part of the 510(k) or 510(k) de-novo notification process, the FDA may have required the following:
 


 
●
Development
    of comprehensive product description and indications for use.

 
 
 

 
●
Completion
    of extensive preclinical tests and preclinical animal studies, performed in accordance with the FDA’s Good Laboratory Practice
    (GLP) regulations.

 
 
 

 
●
Comprehensive
    review of predicate devices and development of data supporting the new product’s substantial equivalence to one or more predicate
    devices.

 
 
 

 
●
If
    appropriate and required, certain types of clinical trials (IDE submission and approval may be required for conducting a clinical
    trial in the US).

 
If
required, clinical trials involve use of the medical device on human subjects under the supervision of qualified investigators in accordance
with current Good Clinical Practices (GCPs), including the requirement that all research subjects provide informed consent for their
participation in the clinical study. A written protocol with predefined end points, an appropriate sample size and pre-determined patient
inclusion and exclusion criteria, is required before initiating and conducting a clinical trial. All clinical investigations of devices
to determine safety and effectiveness must be conducted in accordance with the FDA’s Investigational Device Exemption, or IDE,
regulations that among other things, govern investigational device labeling, prohibit promotion of the investigational device, and specify
recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant
risk,” as defined by the FDA, the agency requires the device sponsor to submit an IDE application, which must become effective
prior to commencing human clinical trials. The IDE will automatically become effective 30 days after receipt by the FDA, unless the FDA
denies the application or notifies the company that the investigation is on hold and may not begin. If the FDA determines that there
are deficiencies or other concerns with an IDE that requires modification, the FDA may permit a clinical trial to proceed under a conditional
approval. In addition, the study must be approved by, and conducted under the oversight of, an Institutional Review Board (IRB) for each
clinical site. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval
for the trial by one or more IRBs without separate approval from the FDA, but it must still follow abbreviated IDE requirements, such
as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.
 
Given
successful completion of all required testing, a detailed 510(k) premarket notification or 510(k) de-novo was submitted to the FDA requesting
clearance to market the product. The notification included all relevant data from pertinent preclinical and clinical trials, together
with detailed information relating to the product’s manufacturing controls and proposed labeling, and other relevant documentation.
 
A
510(k) clearance letter from the FDA then authorized commercial marketing of the device for one or more specific indications of use.
 
After
510(k) clearance, Biotricity is required to comply with a number of post-clearance requirements, including, but not limited to, Medical
Device Reporting and complaint handling, and, if applicable, reporting of corrective actions. Also, quality control and manufacturing
procedures must continue to conform to QSRs. The FDA periodically inspects manufacturing facilities to assess compliance with QSRs, which
impose extensive procedural, substantive, and record keeping requirements on medical device manufacturers. In addition, changes to the
manufacturing process are strictly regulated, and, depending on the change, validation activities may need to be performed. Accordingly,
manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with
QSRs and other types of regulatory controls.
 

16
 

 
After
a device receives 510(k) clearance from FDA, any modification that could significantly affect its safety or effectiveness, or that would
constitute a major change in its intended use or technological characteristics, requires a new 510(k) clearance or could require a PMA.
The FDA requires each manufacturer to make the determination of whether a modification requires a new 510(k) notification or PMA in the
first instance, but the FDA can review any such decision. If the FDA disagrees with a manufacturer’s decision not to seek a new
510(k) clearance or PMA for a particular change, the FDA may retroactively require the manufacturer to seek 510(k) clearance or PMA.
The FDA can also require the manufacturer to cease U.S. marketing and/or recall the modified device until additional 510(k) clearance
or PMA approval is obtained.
 
The
FDA and the Federal Trade Commission, or FTC, will also regulate the advertising claims of Biotricity’s products to ensure that
the claims it makes are consistent with its regulatory clearances, that there is scientific data to substantiate the claims and that
product advertising is neither false nor misleading.
 
We
received 510(k) clearance for both the software and hardware components of our Bioflux and Biocore products. To obtain 510(k) clearance,
a company must submit a notification to the FDA demonstrating that its proposed device is substantially equivalent to a predicate device
(i.e., a device that was in commercial distribution before May 28, 1976, a device that has been reclassified from Class III to Class
I or Class II, or a 510(k)-cleared device). The FDA’s 510(k) clearance process generally takes from three to 12 months from the
date the application is submitted but also can take significantly longer. If the FDA determines that the device or its intended use is
not substantially equivalent to a predicate device, the device is automatically placed into Class III, requiring the submission of a
PMA. Once the information is submitted, there is no guarantee that the FDA will grant a company 510(k) clearance for its pipeline products,
and failure to obtain the necessary clearances for its products would adversely affect its ability to grow its business. Delays in receipt
or failure to receive the necessary clearances, or the failure to comply with existing or future regulatory requirements, could reduce
its business prospects.
 
Devices
that cannot be cleared through the 510(k) process due to lack of a predicate device but would be considered low or moderate risk may
be eligible for the 510(k) de-novo process. In 1997, the Food and Drug Administration Modernization Act, or FDAMA added the de novo classification
pathway now codified in section 513(f)(2) of the 29&C Act. This law established an alternate pathway to classify new devices into
Class I or II that had automatically been placed in Class III after receiving a Not Substantially Equivalent, or NSE, determination in
response to a 510(k) submission. Through this regulatory process, a sponsor who receives an NSE determination may, within 30 days of
receipt, request FDA to make a risk-based classification of the device through what is called a “de novo request.” In 2012,
section 513(f)(2) of the 29&C Act was amended by section 607 of the Food and Drug Administration Safety and Innovation Act (FDASIA),
in order to provide a second option for de novo classification. Under this second pathway, a sponsor who determines that there is no
legally marketed device upon which to base a determination of substantial equivalence can submit a de novo request to FDA without first
submitting a 510(k).
 
In
the event that a company receives a Not Substantially Equivalent determination for its candidates in response to a 510(k) submission,
the device may still be eligible for the 510(k) de-novo classification process.
 
Devices
that cannot be cleared through the 510(k) or 510(k) de-novo classification process require the submission of a PMA. The PMA process is
much more time consuming and demanding than the 510(k) notification process. A PMA must be supported by extensive data, including but
not limited to data obtained from preclinical and/or clinical studies and data relating to manufacturing and labeling, to demonstrate
to the FDA’s satisfaction the safety and effectiveness of the device. After a PMA application is submitted, the FDA’s in-depth
review of the information generally takes between one and three years and may take significantly longer. If the FDA does not grant 510(k)
clearance to its future products, there is no guarantee that Biotricity will submit a PMA or that if it does, that the FDA would grant
a PMA approval of Biotricity’s future products, either of which would adversely affect Biotricity’s business.
 

17
 

 
We
have installed a suitable and effective quality management system, which establishes controlled processes for our product design, manufacturing,
and distribution. We plan to do this in compliance with the internationally recognized standard ISO 13485:2013 Medical Devices –
Quality Management Systems – Requirements for Regulatory Purposes. Following the introduction of a product, the FDA and foreign
agencies engage in periodic reviews of our quality systems, as well as product performance and advertising and promotional materials.
These regulatory controls, as well as any changes in FDA policies, can affect the time and cost associated with the development, introduction
and continued availability of new products. Where possible, we anticipate these factors in our product development processes. These agencies
possess the authority to take various administrative and legal actions against us, such as product recalls, product seizures and other
civil and criminal sanctions.
 
Foreign
Regulation
 
In
addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial
sales and distribution of our products in foreign countries. Whether or not we obtain FDA approval for a product, we must obtain approval
of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the
product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required
for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly
from country to country.
 
The
policies of the FDA and foreign regulatory authorities may change and additional government regulations may be enacted which could prevent
or delay regulatory approval of our products and could also increase the cost of regulatory compliance. We cannot predict the likelihood,
nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the
United States or abroad.
 
Manufacturing
and Suppliers
 
Earlier
in the life-cycle of the Company, we focused primarily on research and development of the first generation version of the Bioflux. We
have since completed the development of Biocore and of Bioheart and their proposed marketing and distribution. We currently assemble
our devices at our Redwood City, California facility. In order to maintain compliance with FDA and other regulatory requirements, our
manufacturing facilities must be periodically re-evaluated and qualified under a quality system to ensure they meet production and quality
standards. Suppliers of components and products used to manufacture our devices must also comply with FDA regulatory requirements, which
often require significant resources and subject us and our suppliers to potential regulatory inspections and stoppages.
 
We
have a scalable manufacturing strategy and goals and use Providence Enterprises (herein “Providence”), which
is an FDA qualified manufacturer for contract manufacturing. We do not have a contract with Providence or any obligation to use them
(nor do they have any obligations with respect to us other than with respect to any specific orders we may make) and we enter into purchase
orders for each manufacturing request we have with Providence, as we would with other vendors. Despite our working relationship with
Providence, we intend to continue to identify and develop other efficient, automated, low-cost manufacturing capabilities and options
to meet the quality, price, engineering, design and production standards or production volumes required to successfully mass market our
products, especially at the low-cost levels we require to facilitate our business plan.
 
We
currently rely on a number of principal suppliers for the components that make up our products and proposed products; these include Digikey
Corporation and Mouser Electronics for electronics and connectors, Telit/Stollmann for Bluetooth modules, Yongan Innovations for batteries,
Dongguan Bole RP&M Cp. Ltd. For plastics, Unimed Medical and Conmed for ECG cables and electrodes, and Medico Systems for touch-panel
LCD displays. We believe that the raw materials used or expected to be used in our planned products can be acquired from multiple sources
and are readily available on the market.
 

18
 

 
Employees
 
We
currently have 55 full-time employees and approximately 20 consultants who are based in our offices located in Silicon Valley, California
and Toronto, Canada. These employees oversee day-to-day operations of the Company and, together with the consultants, support management,
engineering, manufacturing, and administration. We have no unionized employees.
 
We
plan to hire 10 to 15 additional full-time employees within the next 12 months, as needed to support continued growth in our business.
Their principal responsibilities will be the support of our sales, marketing, research and development, and clinical development activities.
 
We
consider relations with our employees to be satisfactory.
 
ITEM
1A. RISK FACTORS
 
Risks
Related to Our Business
 
Natural
disasters and other events beyond our control could materially adversely affect us.
 
Natural
disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy,
and thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power
shortages, pandemics and other events beyond our control. Such events could make it difficult or impossible for us to deliver our services
to our customers and could decrease demand for our services. Pandemics or disease outbreaks such as COVID-19 and its variants (collectively,
“COVID-19”) have had, and may continue to have, impacts on the Company’s business. These include, limited access to
our facilities, customers, management, support staff and professional advisors and can, in future, impact our manufacturing supply chain.
In addition, the general economic and other impacts related to responsive actions taken by governments and others to mitigate the spread
of COVID-19, or in the future other pandemics or disease outbreaks, including but not limited to stay-at-home, shelter-in-place and other
travel restrictions, social distancing requirements, mask mandates, limitations on certain businesses’ hours and operations, limits
on public gatherings and other events, and restrictions on what, may continue to, result in similar declines in store traffic and overall
demand, increased operating costs, and decreased or slower unit/store growth.
 
We
have a limited operating history upon which investors can rely to evaluate our future prospects.
 
We
have a limited operating history upon which an evaluation of its business plan or performance and prospects can be made. The business
and prospects of the Company must be considered in the light of the potential problems, delays, uncertainties and complications encountered
in connection with a newly established business and new industry. The risks include, but are not limited to, the possibility that we
will not be able to develop functional and scalable products and services, or that although functional and scalable, our products and
services will not be economical to market; that our competitors hold proprietary rights that preclude us from marketing such products;
that our competitors market a superior or equivalent product; that we are not able to upgrade and enhance our technologies and products
to accommodate new features and expanded service offerings; or the failure to receive necessary regulatory clearances for our products.
To successfully introduce and market our products at a profit, we must establish brand name recognition and competitive advantages for
our products. There are no assurances that we can successfully address these challenges. If unsuccessful with one or more of these issues,
we and our business, financial condition and operating results could be materially and adversely affected.
 
The
current and future expense levels in our forecasts are based largely on estimates of planned operations and future revenues rather than
experience. It is difficult to accurately forecast future revenues because our business is new and our market has not been fully developed.
If our forecasts prove incorrect, the business, operating results and financial condition of the Company may be materially and adversely
affected. Moreover, we may be unable to adjust our spending in a timely manner to compensate for any unanticipated reduction in revenues.
As a result, any significant reduction in revenues may immediately and adversely affect our business, financial condition and operating
results.
 


19
 

 
We
have not had a long history of producing revenues and we cannot predict when we will achieve sustained profitability.
 
We
have not been profitable, and cannot definitely predict when we will achieve profitability, if ever. We have experienced net losses historically.
We do not anticipate generating significant revenues until we successfully continue to develop, commercialize and sell our existing and
proposed products, of which we can give no assurance. We are unable to determine when we will generate significant revenues from the
sale of new products. Our inability to become profitable may force us to curtail or temporarily discontinue our research and development
programs and our day-to-day operations. Furthermore, there can be no assurance that profitability, if achieved, can be sustained on an
ongoing basis. As of March 31, 2024, we had an accumulated deficit of $127,499,785.
 
We
may not meet our product development and commercialization milestones.
 
We
have established milestones, based upon our expectations regarding our technologies at that time, which we use to assess our progress
toward developing our products. These milestones relate to technology and design improvements as well as dates for achieving development
goals. If our products exhibit technical defects or are unable to meet cost or performance goals, our commercialization schedule could
be delayed and potential purchasers of our initial commercial products may decline to purchase such products or may opt to pursue alternative
products.
 
We
may also experience shortages of monitors, sensors or bases due to manufacturing difficulties. Multiple suppliers provide the components
used in our devices. Our manufacturing operations could be disrupted by fire, earthquake or other natural disaster, a labor-related disruption,
failure in supply or other logistical channels, electrical outages or other reasons. If there were a disruption to manufacturing facilities,
we would be unable to manufacture devices until we have restored and re-qualified our manufacturing capability or developed alternative
manufacturing facilities.
 
Generally,
we have met our milestone schedules when making technological advances in our product. We can give no assurance that our commercialization
schedule will continue to be met as we further develop the Bioflux or any of our other proposed products.
 
We
have entered into a Credit Agreement pursuant to which we have granted the lender a security interest in all of our assets including
our intellectual property and if we default on our obligations in the Credit Agreement the lender could foreclose on our assets.
 
On
December 21, 2021, we entered into a Credit Agreement (“Credit Agreement”) with SWK Funding LLC (“Lender’),
wherein the Company has borrowed $12.3 million, with a maturity date of December 21, 2026. The principal will accrue interest at the
LIBOR Rate plus 10.5% (subject to adjustment as set forth in the Credit Agreement). Pursuant to the Credit Agreement, the Company
will be required to make interest only payments for the first 24 months (which may be extended to 36 months under prescribed
circumstances), after which payments will include principal amortization that accommodates a 40% balloon principal payment at
maturity. Prepayment of amounts owing under the Credit Agreement are allowed under prescribed circumstances. Pursuant to the Credit
Agreement the Company paid an Origination Fee in the amount of $120,000. Based on the Credit Agreement, upon Termination, the
Company shall pay an Exit Fee of $600,000. 
 
The
Company and Lender also entered into a Guarantee and Collateral Agreement wherein the Company agreed to secure the Credit Agreement with
all of the Company’s assets. The Company and Lender also entered into an Intellectual Property Security Agreement dated December
21, 2021 wherein the Credit Agreement is also secured by the Company’s right title and interest in the Company’s Intellectual
Property.
 
If
we default on our obligations to the lender, the lender could foreclose on their security interests and liquidate some or all of these
assets, which would harm our business, financial condition and results of operations and could require us to curtail or cease operations.
 

20
 

 
Our
business is dependent upon physicians utilizing our solution when prescribing cardiac monitoring; if we fail to continue to be successful
in convincing physicians in utilizing our solution, our revenue could fail to grow and could decrease.
 
The
success of our cardiac monitoring business is dependent upon physicians utilizing our solution when prescribing cardiac monitoring to
their patients. The utilization of our solution by physicians for use in the prescription of cardiac monitoring is directly influenced
by a number of factors, including:
 


 
●
the
    ability of the physicians with whom we work to obtain sufficient reimbursement and be paid in a timely manner for the professional
    services they provide in connection with the use of our monitoring solutions;

 
 
 

 
●
continuing
    to establish ourselves as a cardiac technology company;

 
 
 

 
●
our
    ability to educate physicians regarding the benefits of COM over alternative diagnostic monitoring solutions;

 
 
 

 
●
our
    demonstrating that our proposed products are reliable and supported by us in the field;

 
 
 

 
●
supplying
    and servicing sufficient quantities of products directly or through marketing alliances; and

 
 
 

 
●
pricing
    our devices and technology service fees in a medical device industry that is becoming increasingly price sensitive.

 
If
we are unable to drive physician utilization, revenue from the provision of our arrhythmia monitoring solutions could fail to grow or
even potentially decrease.
 
We
are subject to extensive governmental regulations relating to the manufacturing, labeling and marketing of our products.
 
Our
medical technology products and operations are subject to regulation by the FDA, Health Canada and other foreign and local governmental
authorities. These agencies enforce laws and regulations that govern the development, testing, manufacturing, labeling, advertising,
marketing and distribution, and market surveillance of our medical products.
 
Under
the United States Federal Food, Drug, and Cosmetic Act, medical devices are classified into one of three classes — Class I, Class
II or Class III — depending on the degree of risk associated with each medical device and the extent of control needed to ensure
safety and effectiveness. Our Bioflux device is a Class II medical device and we believe our planned products will also be Class II medical
devices. Class II devices are subject to additional controls, including full applicability of the Quality System Regulations, and requirements
for 510(k) pre-market notification.
 
From
time to time, the FDA may disagree with the classification of a new Class II medical device and require the manufacturer of that device
to apply for approval as a Class III medical device. In the event that the FDA determines that our Class II medical products should be
classified as Class III medical devices, we could be precluded from marketing the devices for clinical use within the United States for
a period of time, the length of which depends on the specific change in the classification. Reclassification of our Class II medical
products as Class III medical devices could significantly increase our regulatory costs, including the timing and expense associated
with required clinical trials and other costs.
 

21
 

 
In
addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial
sales and distribution of our products in foreign countries. Whether or not we obtain FDA approval for a product, we must obtain approval
of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the
product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required
for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly
from country to country.
 
The
policies of the FDA and foreign regulatory authorities may change and additional government regulations may be enacted which could prevent
or delay regulatory approval of our products and could also increase the cost of regulatory compliance. We cannot predict the likelihood,
nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the
United States or abroad.
 
The
FDA and non-U.S. regulatory authorities require that our products be manufactured according to rigorous standards. These regulatory requirements
may significantly increase our production costs and may even prevent us from making our products in amounts sufficient to meet market
demand. If we change our approved manufacturing process, the FDA may need to review the process before it may be used. Failure to comply
with applicable regulatory requirements discussed could subject us to enforcement actions, including warning letters, fines, injunctions
and civil penalties, recall or seizure of our products, operating restrictions, partial suspension or total shutdown of our production,
and criminal prosecution.
 
Federal,
state and non-U.S. regulations regarding the manufacture and sale of medical devices are subject to future changes. The complexity, timeframes
and costs associated with obtaining marketing clearances are unknown. Although we cannot predict the impact, if any, these changes might
have on our business, the impact could be material.
 
Following
the introduction of a product, these agencies will also periodically review our design and manufacturing processes and product performance.
The process of complying with the applicable good manufacturing practices, adverse event reporting, clinical trial and other requirements
can be costly and time consuming, and could delay or prevent the production, manufacturing or sale of our products. In addition, if we
fail to comply with applicable regulatory requirements, it could result in fines, delays or suspensions of regulatory clearances, closure
of manufacturing sites, seizures or recalls of products and damage to our reputation. Recent changes in enforcement practice by the FDA
and other agencies have resulted in increased enforcement activity, which increases the compliance risk for the Company and other companies
in our industry. In addition, governmental agencies may impose new requirements regarding registration, labeling or prohibited materials
that may require us to modify or re-register products already on the market or otherwise impact our ability to market our products in
those countries. Once clearance or approval has been obtained for a product, there is an obligation to ensure that all applicable FDA,
Health Canada and other regulatory requirements continue to be met.
 
Additionally,
injuries caused by the malfunction or misuse of cardiac monitoring devices, even where such malfunction or misuse occurs with respect
to one of our competitor’s products, could cause regulatory agencies to implement more conservative regulations on the medical
cardiac monitoring industry, which could significantly increase our operating costs.
 
If
our customers are not able to both obtain and maintain adequate levels of third-party reimbursement for services using our products,
it would have a material adverse effect on our business.
 
Healthcare
providers and related facilities are generally reimbursed for their services through payment systems managed by various governmental
agencies worldwide, private insurance companies, and managed care organizations. The manner and level of reimbursement in any given case
may depend on the site of care, the procedure(s) performed, the final patient diagnosis, the device(s) utilized, available budget, the
efficacy, safety, performance and cost-effectiveness of our planned products and services, or a combination of these or other factors,
and coverage and payment levels are determined at each payer’s discretion. The coverage policies and reimbursement levels of these
third-party payers may impact the decisions of healthcare providers and facilities regarding which medical products they purchase and
the prices they are willing to pay for those products. Thus, changes in reimbursement levels or methods may either positively or negatively
impact sales of our products.
 

22
 

 
We
have no direct control over payer decision-making with respect to coverage and payment levels for our medical device products. Additionally,
we expect many payers to continue to explore cost-containment strategies (e.g., comparative and cost-effectiveness analyses, so-called
“pay-for-performance” programs implemented by various public and private payers, and expansion of payment bundling schemes
such as Accountable Care Organizations, and other such methods that shift medical cost risk to providers) that may potentially impact
coverage and/or payment levels for our current products or products we develop.
 
The
ability of physicians and other providers to successfully utilize our cardiac monitoring solution and successfully allow payors to reimburse
for the physicians’ technical and professional fees is critical to our business because physicians and their patients will select
arrhythmia monitoring solutions other than ours in the event that payors refuse to adequately reimburse our technical fees and physicians’
professional fees.
 
Our
customers may experience difficulty in obtaining reimbursement for our services from commercial payors that consider our technology to
be experimental and investigational, which would adversely affect our revenue and operating results.
 
Many
commercial payors refuse to enter into contracts to reimburse the fees associated with medical devices or services that such payors determine
to be “experimental and investigational.” Commercial payors typically label medical devices or services as “experimental
and investigational” until such devices or services have demonstrated product superiority evidenced by a randomized clinical trial.
 
Clinical
trials have been performed on other mobile cardiac telemetry devices, proving higher diagnostic yield than traditional event loop monitoring.
Certain remaining commercial payors, however, have stated that they do not believe the data from the clinical trials justifies the removal
of the experimental designation for mobile cardiac telemetry solutions. As a result, certain commercial payors may refuse to reimburse
the technical and professional fees associated with cardiac monitoring solutions such as the one expected to be offered by Biotricity.
 
If
commercial payors decide not reimburse physicians or providers for their services during the utilization of our cardiac monitoring solutions,
our revenue could fail to grow and could decrease.
 
Reimbursement
by Medicare is highly regulated and subject to change; our failure to comply with applicable regulations, could decrease our expected
revenue and may subject us to penalties or have an adverse impact on our business.
 
The
Medicare program is administered by the Centers for Medicare and Medicaid Services (“CMS”), which imposes extensive and detailed
requirements on medical services providers, including, but not limited to, rules that govern how we structure our relationships with
physicians, and how and where we provide our arrhythmia monitoring solutions. Our failure to comply with applicable Medicare rules could
result in discontinuing the ability for physicians to receive reimbursement as they will likely utilize our cardiac monitoring solution
under the Medicare payment program, civil monetary penalties, and/or criminal penalties, any of which could have a material adverse effect
on our business and revenues.
 
Consolidation
of commercial payors could result in payors eliminating coverage of mobile cardiac monitoring solutions or reducing reimbursement rates.
 
When
payors combine their operations, the combined company may elect to reimburse physicians for cardiac monitoring services at the lowest
rate paid by any of the participants in the consolidation. If one of the payors participating in the consolidation does not reimburse
for these services at all, the combined company may elect not to reimburse at any rate. Reimbursement rates tend to be lower for larger
payors. As a result, as payors consolidate, our expected average reimbursement rate may decline.
 

23
 

 
Product
defects could adversely affect the results of our operations.
 
The
design, manufacture and marketing of our products involve certain inherent risks. Manufacturing or design defects, unanticipated use
of our products, or inadequate disclosure of risks relating to the use of our products can lead to injury or other adverse events. These
events could lead to recalls or safety alerts relating to our products (either voluntary or required by the FDA, Health Canada or similar
governmental authorities in other countries), and could result, in certain cases, in the removal of a product from the market. A recall
could result in significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our products.
Personal injuries relating to the use of our products could also result in product liability claims being brought against us. In some
circumstances, such adverse events could also cause delays in new product approvals.
 
Interruptions
or delays in telecommunications systems or in the data services provided to us by cellular communication providers or the loss of our
wireless or data services could impair the delivery of our cardiac monitoring services.
 
The
success of Biotricity’s cardiac monitoring services will be dependent upon our ability to store, retrieve, process and manage data
and to maintain and upgrade our data processing and communication capabilities. The monitoring solution relies on a third-party wireless
carrier to transmit data over its data network. All data sent by our monitors via this wireless data network or via landline is expected
to be routed directly to data centers and subsequently routed to the third-party ECG monitoring centers. We are therefore dependent upon
third party wireless carrier to provide data transmission and data hosting services to us. If we lose wireless carrier services, we would
be forced to seek alternative providers of data transmission and data hosting services, which might not be available on commercially
reasonable terms or at all.
 
As
we expand our commercial activities, an increased burden is expected to be placed upon our data processing systems and the equipment
upon which they rely. Interruptions of our data networks, or the data networks of our wireless carrier, for any extended length of time,
loss of stored data or other computer problems could have a material adverse effect on our business and operating results. Frequent or
persistent interruptions in our arrhythmia monitoring services could cause permanent harm to our reputation and could cause current or
potential users or prescribing physicians to believe that our systems are unreliable, leading them to switch to our competitors. Such
interruptions could result in liability, claims and litigation against us for damages or injuries resulting from the disruption in service.
 
Our
systems are also expected to be vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures,
terrorist attacks, computer viruses, break-ins, sabotage, and acts of vandalism. Despite any precautions that we may take, the occurrence
of a natural disaster or other unanticipated problems could result in lengthy interruptions in these services. We do not carry business
interruption insurance to protect against losses that may result from interruptions in service as a result of system failures. Moreover,
the communications and information technology industries are subject to rapid and significant changes, and our ability to operate and
compete is dependent on our ability to update and enhance the communication technologies used in our systems and services.
 
We
could be exposed to significant liability claims if we are unable to obtain insurance at acceptable costs and adequate levels or otherwise
protect ourselves against potential product liability claims.
 
The
testing, manufacture, marketing and sale of medical devices entail the inherent risk of liability claims or product recalls. Product
liability insurance is expensive and, if available, may not be available on acceptable terms at all periods of time. A successful product
liability claim or product recall could inhibit or prevent the successful commercialization of our products, cause a significant financial
burden on the Company, or both, which in either case could have a material adverse effect on our business and financial condition.
 

24
 

 
We
require additional capital to support our present business plan and our anticipated business growth, and such capital may not be available
on acceptable terms, or at all, which would adversely affect our ability to operate.
 
We
will require additional funds to further develop our business plan. Based on our current operating plans, we plan to use an
additional $10 million in capital to fund our planned operations and sales efforts necessary to propel the commercialization of
Bioflux and Biocore into broader US markets. We may choose to raise additional capital beyond this in order to expedite and propel
growth more rapidly. We can give no assurance that we will be successful in raising any additional funds. Additionally, if we are
unable to generate sufficient planned revenues from our sales and operating activities, we may need to raise additional funds, doing
so through debt and equity offerings, in order to meet our expected future liquidity and capital requirements, including capital
required for the development completion and introduction of our other planned products and technologies. Any such financing that we
undertake will likely be dilutive to current stockholders.
 
We
intend to continue to make investments to support our business growth, including patent or other intellectual property asset creation.
In addition, we may also need additional funds to respond to business opportunities and challenges, including our ongoing operating expenses,
protecting our intellectual property, satisfying debt payment obligations, developing new lines of business and enhancing our operating
infrastructure. While we may need to seek additional funding for such purposes, we may not be able to obtain financing on acceptable
terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock.
We may also seek to raise additional funds through arrangements with collaborators or other third parties. We may not be able to negotiate
any such arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required
to curtail or terminate some or all of our business plans.
 
We
cannot predict our future capital needs and we may not be able to secure additional financing.
 
We
will need to raise additional funds in the future to fund our working capital needs and to fund further expansion of our business. We
may require additional equity or debt financings, collaborative arrangements with corporate partners or funds from other sources for
these purposes. No assurance can be given that necessary funds will be available for us to finance our development on acceptable terms,
if at all. Furthermore, such additional financings may involve substantial dilution of our stockholders or may require that we relinquish
rights to certain of our technologies or products. In addition, we may experience operational difficulties and delays due to working
capital restrictions. If adequate funds are not available from operations or additional sources of financing, we may have to delay or
scale back our growth plans.
 
The
results of our research and development efforts are uncertain and there can be no assurance of the continued commercial success of our
products.
 
We
believe that we will need to incur additional research and development expenditures to continue development of our existing proposed
products as well as research and development expenditures to develop new products and services. The products and services we are developing
and may develop in the future may not be technologically successful. In addition, the length of our product and service development cycle
may be greater than we originally expected, and we may experience delays in product development. If our resulting products and services
are not technologically successful, they may not achieve market acceptance or compete effectively with our competitors’ products
and services.
 
If
we fail to retain certain of our key personnel and attract and retain additional qualified personnel, we might not be able to pursue
our growth strategy.
 
Our
future success will depend upon the continued service of Waqaas Al-Siddiq, our President and Chief Executive Officer. We entered into
an employment with Mr. Al-Siddiq on April 10, 2020 pursuant to which he will continue to serve as Chief Executive officer for 12 months
from the execution date unless his employment is terminated sooner or the employment agreement is automatically renewed pursuant to its
terms. Although we believe that our relationship with him is positive, there can be no assurance that his services will continue to be
available to us in the future. We do not carry any key man life insurance policies on any of our executive officers.
 

25
 

 
Executive
and legislative actions, or legal proceedings that seek to amend or impede the implementation of the Affordable Care Act, as well as
future efforts to repeal, replace or further modify the Affordable Care Act may adversely affect our business, financial condition and
results of operations.
 
Since
its adoption into law in 2010, the Affordable Care Act has been challenged before the U.S. Supreme Court, and Congress in order to delay,
defund, or repeal implementation of or amend significant provisions of the Affordable Care Act. In addition, there continues to be ongoing
litigation over the interpretation and implementation of certain provisions of the law. The net effect of the Affordable Care Act, as
currently in effect, on our business is subject to a number of variables, including the law’s complexity, lack of complete implementing
regulations and interpretive guidance, and the sporadic implementation of the numerous programs designed to improve access to and the
quality of healthcare services. Additional variables of the Affordable Care Act impacting our business will be how states, providers,
insurance companies, employers, and other market participants respond to any future challenges to the Affordable Care Act.
 
We
cannot predict whether the Affordable Care Act will be modified, or whether it will be repealed or replaced, in whole or in part, and,
if so, what the replacement plan or modifications would be, when the replacement plan or modifications would become effective, or whether
any of the existing provisions of the Affordable Care Act would remain in place
 
We
will not be profitable unless we can demonstrate that our products can be manufactured at low prices.
 
To
date, we have focused primarily on research and development of the first-generation version of the Bioflux, as well as other technologies
we plan to introduce in our eco-system, and their proposed marketing and distribution. Consequently, we have little experience in manufacturing
these products on a commercial basis. We may manufacture our products through third-party manufacturers. We can offer no assurance that
either we or our manufacturing partners will develop efficient, automated, low-cost manufacturing capabilities and processes to meet
the quality, price, engineering, design and production standards or production volumes required to successfully mass market our products,
especially at the low-cost levels we require to absorb the cost of near free distribution of our products pursuant to our proposed business
plan. Even if we or our manufacturing partners are successful in developing such manufacturing capability and processes, we do not know
whether we or they will be timely in meeting our product commercialization schedule or the production and delivery requirements of potential
customers. A failure to develop such manufacturing processes and capabilities could have a material adverse effect on our business and
financial results.
 
Our
profitability in part is dependent on material and other manufacturing costs. We are unable to offer any assurance that either we or
a manufacturing partner will be able to reduce costs to a level which will allow production of a competitive product or that any product
produced using lower cost materials and manufacturing processes will not suffer from a reduction in performance, reliability and longevity.
 
If
we or our suppliers fail to achieve or maintain regulatory approval of manufacturing facilities, our growth could be limited, and our
business could be harmed.
 
We
currently assemble devices in our California facility. To maintain compliance with FDA and other regulatory requirements, our manufacturing
facilities must be periodically re-evaluated and qualified under a quality system to ensure they meet production and quality standards.
Suppliers of components and products used to manufacture our devices must also comply with FDA regulatory requirements, which often require
significant resources and subject us and our suppliers to potential regulatory inspections and stoppages. If we or our suppliers do not
maintain regulatory approval for our manufacturing operations, our business could be adversely affected.
 

26
 

 
Our
dependence on a limited number of suppliers may prevent us from delivering our devices on a timely basis.
 
We
currently rely on a limited number of suppliers of components for our devices. If these suppliers became unable to provide components
in the volumes needed or at an acceptable price, we would have to identify and qualify acceptable replacements from alternative sources
of supply. The process of qualifying suppliers is lengthy. Delays or interruptions in the supply of our requirements could limit or stop
our ability to provide sufficient quantities of devices on a timely basis or meet demand for our services, which could have a material
adverse effect on our business, financial condition and results of operations.
 
Our
operations in international markets involve inherent risks that we may not be able to control.
 
Our
business plan includes the marketing and sale of our proposed products in international markets. Accordingly, our results could be materially
and adversely affected by a variety of uncontrollable and changing factors relating to international business operations, including:
 


 
●
Macroeconomic
    conditions adversely affecting geographies where we intend to do business;

 
 
 

 
●
Foreign
    currency exchange rates;

 
 
 

 
●
Political
    or social unrest or economic instability in a specific country or region;

 
 
 

 
●
Higher
    costs of doing business in foreign countries;

 
 
 

 
●
Infringement
    claims on foreign patents, copyrights or trademark rights;

 
 
 

 
●
Difficulties
    in staffing and managing operations across disparate geographic areas;

 
 
 

 
●
Difficulties
    associated with enforcing agreements and intellectual property rights through foreign legal systems;

 
 
 

 
●
Trade
    protection measures and other regulatory requirements, which affect our ability to import or export our products from or to various
    countries;

 
 
 

 
●
Adverse
    tax consequences;

 
 
 

 
●
Unexpected
    changes in legal and regulatory requirements;

 
 
 

 
●
Military
    conflict, terrorist activities, natural disasters and medical epidemics; and

 
 
 

 
●
Our
    ability to recruit and retain channel partners in foreign jurisdictions.

 
Our
existing and future levels of indebtedness could adversely affect our financial health, ability to obtain financing in the future, ability
to react to changes in our business and ability to fulfill our obligations under such indebtedness.
 
As
of March 31, 2024, in addition to our accounts payable, we had aggregate outstanding indebtedness of $22.5 million compared to $17.8
million for the year ended March 31, 2023. This level of indebtedness could:
 


 
●
Make
    it more difficult for us to satisfy our obligations with respect to our outstanding notes and other indebtedness, resulting in possible
    defaults on and acceleration of such indebtedness.

 
●
Require
    us to dedicate a substantial portion of our cash flow from operations to the payment of principal and interest on our indebtedness,
    thereby reducing the availability of such cash flows to fund working capital, acquisitions, capital expenditures and other general
    corporate purposes.

 
●
Limit
    our ability to obtain additional financing for working capital, acquisitions, capital expenditures, debt service requirements and
    other general corporate purposes.

 
●
Limit
    our ability to refinance indebtedness or cause the associated costs of such refinancing to increase.

 

27
 

 


 
●
Increase
    our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations (because our borrowings
    are at variable rates of interest); and

 
●
Place
    us at a competitive disadvantage compared to our competitors with proportionately less debt or comparable debt at more favorable
    interest rates which, as a result, may be better positioned to withstand economic downturns.

 
Our
auditors have indicated doubt about our ability to continue as a going concern.
 
As
of March 31, 2024, the Company had $786,060 in cash, accumulated deficit of $127,499,785 and cash flow used in operations of $6,693,912 for the fiscal year then ended. The Company has incurred and expects to continue to incur significant costs in pursuit of its
expansion and development plans. These conditions raise doubt about the Company’s ability to continue as a going concern and accordingly
our auditors have included a going concern opinion in our annual report. Management has taken certain action and continues to implement
changes designed to improve the Company’s financial results and operating cash flows. The actions involve certain cost-saving initiatives
and growing strategies, including (a) engage in very limited activities without incurring any liabilities that must be satisfied in cash;
and (b) offer noncash consideration and seek for equity lines as a means of financing its operations. Additionally, the Company’s
plan includes certain scheduled research and development activities and related clinical trials which may be deferred as needed. If the
Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to
cover any operating losses it may incur, it may substantially curtail its operations or seek other business opportunities through strategic
alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.
 
Risks
Related to Our Industry
 
The
industry in which we operate is highly competitive and subject to rapid technological change. If our competitors are better able to develop
and market products that are safer, more effective, less costly, easier to use, or are otherwise more attractive, we may be unable to
compete effectively with other companies.
 
The
medical technology industry is characterized by intense competition and rapid technological change, and we will face competition on the
basis of product features, clinical outcomes, price, services and other factors. Competitors may include large medical device and other
companies, some of which have significantly greater financial and marketing resources than we do, and firms that are more specialized
than we are with respect to particular markets. Our competition may respond more quickly to new or emerging technologies, undertake more
extensive marketing campaigns, have greater financial, marketing and other resources than ours or may be more successful in attracting
potential customers, employees and strategic partners.
 
Our
competitive position will depend on multiple, complex factors, including our ability to achieve regulatory clearance and market acceptance
for our products, develop new products, implement production and marketing plans, secure regulatory approvals for products under development
and protect our intellectual property. In some instances, competitors may also offer, or may attempt to develop, alternative systems
that may be delivered without a medical device or a medical device superior to ours. The development of new or improved products, processes
or technologies by other companies may render our products or proposed products obsolete or less competitive. The entry into the market
of manufacturers located in low-cost manufacturing locations may also create pricing pressure, particularly in developing markets. Our
future success depends, among other things, upon our ability to compete effectively against current technology, as well as to respond
effectively to technological advances or changing regulatory requirements, and upon our ability to successfully implement our marketing
strategies and execute our research and development plan. Our research and development efforts are aimed, in part, at solving increasingly
complex problems, as well as creating new technologies, and we do not expect that all of our projects will be successful. If our research
and development efforts are unsuccessful, our future results of operations could be materially harmed.
 

28
 

 
We
face competition from other medical device companies that focus on similar markets.
 
We
face competition from other companies that have longer operating histories and may have greater name recognition and substantially greater
financial, technical and marketing resources than us. Many of these companies also have FDA or other applicable governmental approval
to market and sell their products, and more extensive customer bases, broader customer relationships and broader industry alliances than
us, including relationships with many of our potential customers. Increased competition from any of these sources could result in our
failure to achieve and maintain an adequate level of customers and market share to support the cost of our operations.
 
Unsuccessful
clinical or other trials or procedures relating to products under development could have a material adverse effect on our prospects.
 
The
regulatory approval process for new products and new indications for existing products requires extensive clinical trials and procedures,
including early clinical experiences and regulatory studies. Unfavorable or inconsistent clinical data from current or future clinical
trials or procedures conducted by us, our competitors, or third parties, or perceptions regarding this clinical data, could adversely
affect our ability to obtain necessary approvals and the market’s view of our future prospects. Such clinical trials and procedures
are inherently uncertain and there can be no assurance that these trials or procedures will be completed in a timely or cost-effective
manner or result in a commercially viable product. Failure to successfully complete these trials or procedures in a timely and cost-effective
manner could have a material adverse effect on our prospects. Clinical trials or procedures may experience significant setbacks even
after earlier trials have shown promising results. Further, preliminary results from clinical trials or procedures may be contradicted
by subsequent clinical analysis. In addition, results from our clinical trials or procedures may not be supported by actual long-term
studies or clinical experience. If preliminary clinical results are later contradicted, or if initial results cannot be supported by
actual long-term studies or clinical experience, our business could be adversely affected. Clinical trials or procedures may be suspended
or terminated by us, the FDA or other regulatory authorities at any time if it is believed that the trial participants face unacceptable
health risks.
 
Intellectual
property litigation and infringement claims could cause us to incur significant expenses or prevent us from selling certain of our products.
 
The
medical device industry in which we operate is characterized by extensive intellectual property litigation and, from time to time, we
might be the subject of claims by third parties of potential infringement or misappropriation. Regardless of outcome, such claims are
expensive to defend and divert the time and effort of our management and operating personnel from other business issues. A successful
claim or claims of patent or other intellectual property infringement against us could result in our payment of significant monetary
damages and/or royalty payments, or it could negatively impact our ability to sell current or future products in the affected category
and could have a material adverse effect on business, cash flows, financial condition or results of operations.
 
If
we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
 
We
plan on relying on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive
position. We will seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties
who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants,
advisors and other third parties. We will seek to protect our confidential proprietary information, in part, by entering into confidentiality
and invention or intellectual property assignment agreements with our employees and consultants. Moreover, to the extent we enter into
such agreements, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets,
and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated
a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside
the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or
independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that
technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor,
our competitive position would be harmed. In general, any loss of trade secret protection or other unpatented proprietary rights could
harm our business, results of operations and financial condition.
 


29
 

 
If
we are unable to protect our proprietary rights, or if we infringe on the proprietary rights of others, our competitiveness and business
prospects may be materially damaged.
 
We
have filed for one industrial design patent in Canada and in the U.S. We may continue to seek patent protection for our designs and may
seek patent protection for our proprietary technology if warranted. Seeking patent protection is a lengthy and costly process, and there
can be no assurance that patents will be issued from any pending applications, or that any claims allowed from existing or pending patents
will be sufficiently broad or strong to protect our designs or our proprietary technology. There is also no guarantee that any patents
we hold will not be challenged, invalidated or circumvented, or that the patent rights granted will provide competitive advantages to
us. Our competitors have developed and may continue to develop and obtain patents for technologies that are similar or superior to our
technologies. In addition, the laws of foreign jurisdictions in which we develop, manufacture or sell our products may not protect our
intellectual property rights to the same extent, as do the laws of Canada or the United States.
 
Adverse
outcomes in current or future legal disputes regarding patent and other intellectual property rights could result in the loss of our
intellectual property rights, subject us to significant liabilities to third parties, require us to seek licenses from third parties
on terms that may not be reasonable or favorable to us, prevent us from manufacturing, importing or selling our products, or compel us
to redesign our products to avoid infringing third parties’ intellectual property. As a result, we may be required to incur substantial
costs to prosecute, enforce or defend our intellectual property rights if they are challenged. Any of these circumstances could have
a material adverse effect on our business, financial condition and resources or results of operations.
 
Dependence
on our proprietary rights and failing to protect such rights or to be successful in litigation related to such rights may result in our
payment of significant monetary damages or impact offerings in our product portfolios.
 
Our
long-term success largely depends on our ability to market technologically competitive products. If we fail to obtain or maintain adequate
intellectual property protection, we may not be able to prevent third parties from using our proprietary technologies or may lose access
to technologies critical to our products. Also, our currently pending industrial design patent or any future patents applications may
not result in issued patents, and issued patents are subject to claims concerning priority, scope and other issues.
 
Furthermore,
to the extent we do not file applications for patents domestically or internationally, we may not be able to prevent third parties from
using our proprietary technologies or may lose access to technologies critical to our products in other countries.
 
Enforcement
of federal and state laws regarding privacy and security of patient information may adversely affect our business, financial condition
or operations.
 
The
use and disclosure of certain health care information by health care providers and their business associates have come under increasing
public scrutiny. Recent federal standards under the Health Insurance Portability and Accountability Act of 1996, or HIPAA, establish
rules concerning how individually identifiable health information may be used, disclosed and protected. Historically, state law has governed
confidentiality issues, and HIPAA preserves these laws to the extent they are more protective of a patient’s privacy or provide
the patient with more access to his or her health information. As a result of the implementation of the HIPAA regulations, many states
are considering revisions to their existing laws and regulations that may or may not be more stringent or burdensome than the federal
HIPAA provisions. We must operate our business in a manner that complies with all applicable laws, both federal and state, and that does
not jeopardize the ability of our customers to comply with all applicable laws. We believe that our operations are consistent with these
legal standards. Nevertheless, these laws and regulations present risks for health care providers and their business associates that
provide services to patients in multiple states. Because these laws and regulations are recent, and few have been interpreted by government
regulators or courts, our interpretations of these laws and regulations may be incorrect. If a challenge to our activities is successful,
it could have an adverse effect on our operations, may require us to forego relationships with customers in certain states and may restrict
the territory available to us to expand our business. In addition, even if our interpretations of HIPAA and other federal and state laws
and regulations are correct, we could be held liable for unauthorized uses or disclosures of patient information as a result of inadequate
systems and controls to protect this information or as a result of the theft of information by unauthorized computer programmers who
penetrate our network security. Enforcement of these laws against us could have a material adverse effect on our business, financial
condition and results of operations.
 


30
 

 
We
may become subject, directly or indirectly, to federal and state health care fraud and abuse laws and regulations and if we are unable
to fully comply with such laws, the Company could face substantial penalties.
 
Although
not affected at this time, our operations may in the future become directly or indirectly affected by various broad state and federal
health care fraud and abuse laws, including the Federal Healthcare Programs’ Anti-Kickback Statute and the Stark law, which among
other things, prohibits a physician from referring Medicare and Medicaid patients to an entity with which the physician has a financial
relationship, subject to certain exceptions. If our future operations are found to be in violation of these laws, we or our officers
may be subject to civil or criminal penalties, including large monetary penalties, damages, fines, imprisonment and exclusion from Medicare
and Medicaid program participation. If enforcement action were to occur, our business and results of operations could be adversely affected.
 
We
may be subject to federal and state false claims laws which impose substantial penalties.
 
Many
of the physicians and patients whom we expect to use our services will file claims for reimbursement with government programs such as
Medicare and Medicaid. As a result, we may be subject to the federal False Claims Act if we knowingly “cause” the filing
of false claims. Violations may result in substantial civil penalties, including treble damages. The federal False Claims Act also contains
“whistleblower” or “qui tam” provisions that allow private individuals to bring actions on behalf of the government
alleging that the defendant has defrauded the government. In recent years, the number of suits brought in the medical industry by private
individuals has increased dramatically. Various states have enacted laws modeled after the federal False Claims Act, including “qui
tam” provisions, and some of these laws apply to claims filed with commercial insurers. We are unable to predict whether we could
be subject to actions under the federal False Claims Act, or the impact of such actions. However, the costs of defending claims under
the False Claims Act, as well as sanctions imposed under the False Claims Act, could adversely affect our results of operations.
 
Changes
in the health care industry or tort reform could reduce the number of arrhythmia monitoring solutions ordered by physicians, which could
result in a decline in the demand for our planned solutions, pricing pressure and decreased revenue.
 
Changes
in the health care industry directed at controlling health care costs or perceived over-utilization of arrhythmia monitoring solutions
could reduce the volume of solutions ordered by physicians. If more health care cost controls are broadly instituted throughout the health
care industry, the volume of cardiac monitoring solutions could decrease, resulting in pricing pressure and declining demand for our
planned services, which could harm our operating results. In addition, it has been suggested that some physicians order arrhythmia monitoring
solutions, even when the services may have limited clinical utility, primarily to establish a record for defense in the event of a claim
of medical malpractice against the physician. Legal changes increasing the difficulty of initiating medical malpractice cases, known
as tort reform, could reduce the amount of our services prescribed as physicians respond to reduced risks of litigation, which could
harm our operating results.
 

31
 

 
Risks
Related to Our Securities and Other Risks
 

If we are unable to continue to meet the listing
requirements of Nasdaq, our common stock will be delisted.
 
On
August 1, 2023, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of Nasdaq
notifying the Company that, for the preceding 30 consecutive business days, the Company’s Market Value of Listed Securities (“MVLS”)
was below the $35 million minimum requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2)
(the “MVLS Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), Nasdaq granted the Company 180 calendar days,
or until January 29, 2024 (the “Compliance Date”), to regain compliance with the MVLS Requirement.
 
On
January 30, 2024, the Company received a delisting determination letter from the Staff advising the Company that the Staff had determined
that the Company did not regain compliance with the MVLS Requirement by the Compliance Date because the Company’s MVLS did not
close at or above $35 million for a minimum of 10 consecutive business days prior to the Compliance Date. The Company submitted a hearing
request to the Nasdaq Hearings Panel (the “Panel”) to appeal the Staff’s delisting determination, which stayed the
suspension of the Company’s securities and the filing of a Form 25-NSE pending the Panel’s decision. A hearing was held on
April 9, 2024, at which time the Company presented a plan to regain compliance with the MVLS Requirement.
 
On
April 23, 2024, Nasdaq notified the Company that the Panel granted its request to continue its listing on Nasdaq, subject to the Company
meeting certain milestones including an increase in its outstanding shares of common stock through the issuance of shares of stock in
certain stock offerings and upon the conversion of certain convertible securities, the receipt of shareholder approval of certain actions
and on or before July 29, 2024, the Company regaining compliance with all applicable requirements for continued listing on The Nasdaq
Capital Market.
 
On
May 1, 2024, the Company received a letter from Nasdaq stating that it is not in compliance with the Nasdaq Listing Rule 5620(a) requiring
that the Company hold an annual meeting of stockholders within 12 months of the end of its fiscal year. The notification received has
no immediate effect on the Company’s continued listing on the Nasdaq Capital Market, subject to its compliance with the other continued
listing requirements.
 
In
the letter dated May 1, 2024, Nasdaq notified the Company that this serves as an additional basis for delisting of the Company’s
securities from Nasdaq and that the letter was formal notification that Nasdaq’s Hearings Panel will consider the matter in their
decision regarding the Company’s continued listing on Nasdaq following the Company’s recent hearing before the Panel on April
9, 2024. The Company was instructed to present its views with respect to this additional deficiency to the Panel in writing no later
than May 8, 2024, which the Company did.
 
If
we are unable to achieve and maintain compliance with such listing standards or other Nasdaq listing requirements in the future, our
common stock could be delisted from Nasdaq. A delisting of our common stock and our inability to list on another national securities
market could negatively impact us by: (i) reducing the liquidity and market price of our common stock; (ii) reducing the number of investors
willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; (iii) limiting our
ability to use certain registration statements to offer and sell freely tradable securities, thereby limiting our ability to access the
public capital markets; and (iv) impairing our ability to provide equity incentives to our employees.
 
There
is a limited existing market for our common stock and we do not know if a more liquid market for our common stock will develop to provide
you with adequate liquidity.
 
Until
August 25, 2021, our common stock was quoted on the OTCQB. As of August 26, 2021, our common stock began trading on the Nasdaq Capital
Market. We cannot assure you that a more active trading market for our common stock will develop or if it does develop, that it will
be maintained. You may not be able to sell your securities quickly or at the market price if trading in our securities is not active.
In the absence of an active public trading market:
 


 
●
you
    may not be able to resell your securities at or above the public offering price;

 
●
the
    market price of our common stock may experience more price volatility; and

 
●
there
    may be less efficiency in carrying out your purchase and sale orders.

 
The
market price of our common stock may be volatile.
 
The
market price for our common stock may be volatile and subject to wide fluctuations in response to factors including the following:
 


 
●
Our
    ability to successfully bring any of our proposed or planned products to market;

 
 
 

 
●
Actual
    or anticipated fluctuations in our quarterly or annual operating results;

 
 
 

 
●
Changes
    in financial or operational estimates or projections;

 
 
 

 
●
Conditions
    in markets generally;

 
 
 

 
●
Changes
    in the economic performance or market valuations of companies similar to ours;

 
 
 

 
●
Announcements
    by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;

 
 
 

 
●
Our
    intellectual property position; and

 
 
 

 
●
General
    economic or political conditions in the United States or elsewhere.

 

32
 

 
In
addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the
operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of
shares of our common stock.
 
There
may be a significant number of shares of common stock eligible for sale, which could depress the market price of such stock.
 
We
have 21,484,396 outstanding shares as of June 25,
2024, of which 7,067,838 are unrestricted shares of common stock, such that a large number
of shares of our common stock could be made available for sale in the public market, which could harm the market price of the stock.
We also have 160,672 Exchangeable Shares, directly exchangeable into an equivalent number
of shares of common stock, which could be exchanged and made available for sale in public markets,
 
Our
largest stockholder will substantially influence our Company for the foreseeable future, including the outcome of matters requiring shareholder
approval and such control may prevent you and other stockholders from influencing significant corporate decisions and may result in conflicts
of interest that could cause the Company’s stock price to decline.
 
Mr.
Al-Siddiq, our chief executive officer and a member of our board of directors, beneficially owns approximately 7.21% of our outstanding
shares of common stock and common stock underlying the Exchangeable Shares. As a result, coupled with his board seat, he will have the
ability to influence the election of our directors and the outcome of corporate actions requiring shareholder approval, such as: (i)
a merger or a sale of our Company, (ii) a sale of all or substantially all of our assets, and (iii) amendments to our articles of incorporation
and bylaws. This concentration of voting power and control could have a significant effect in delaying, deferring or preventing an action
that might otherwise be beneficial to our other shareholders and be disadvantageous to our shareholders with interests different from
those entities and individuals. Mr. Al-Siddiq also has significant control over our business, policies and affairs as an executive officer
or director of our Company. He may also exert influence in delaying or preventing a change in control of the Company, even if such change
in control would benefit the other stockholders of the Company. In addition, the significant concentration of stock ownership may adversely
affect the market value of the Company’s common stock due to investors’ perception that conflicts of interest may exist or
arise.
 
Failure
to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002
(“Sarbanes-Oxley Act”) could cause our financial reports to be inaccurate.
 
We
are required pursuant to Section 404 of the Sarbanes-Oxley Act to maintain internal control over financial reporting and to assess and
report on the effectiveness of those controls. This assessment includes disclosure of any material weaknesses identified by our management
in our internal control over financial reporting. Although we prepare our financial statements in accordance with accounting principles
generally accepted in the United States, our internal accounting controls may not meet all standards applicable to companies with publicly
traded securities. If we fail to implement any required improvements to our disclosure controls and procedures, we may be obligated to
report control deficiencies and our independent registered public accounting firm may not be able to certify the effectiveness of our
internal controls over financial reporting. In either case, we could become subject to regulatory sanction or investigation. Further,
these outcomes could damage investor confidence in the accuracy and reliability of our financial statements.
 
Our
management has concluded that our internal controls over financial reporting were, and continue to be, effective, as of March 31, 2024.
If we are not able to maintain effective internal control over financial reporting, our financial statements, including related disclosures,
may be inaccurate, which could have a material adverse effect on our business.
 

33
 

 
Our
issuance of additional common stock or preferred stock may cause our common stock price to decline, which may negatively impact your
investment.
 
Issuances
of a substantial number of additional shares of our common or preferred stock, or the perception that such issuances could occur, may
cause prevailing market prices for our common stock to decline. In addition, our board of directors is authorized to issue additional
series of shares of preferred stock without any action on the part of our stockholders. Our board of directors also has the power, without
stockholder approval, to set the terms of any such series of shares of preferred stock that may be issued, including voting rights, conversion
rights, dividend rights, preferences over our common stock with respect to dividends or if we liquidate, dissolve or wind up our business
and other terms. If we issue cumulative preferred stock in the future that has preference over our common stock with respect to the payment
of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting
power of our common stock, the market price of our common stock could decrease.
 
Anti-takeover
provisions in the Company’s charter and bylaws may prevent or frustrate attempts by stockholders to change the board of directors
or current management and could make a third-party acquisition of the Company difficult.
 
The
Company’s certificate of incorporation and bylaws contain provisions that may discourage, delay or prevent a merger,
acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might
otherwise receive a premium for their shares. For example, our Certificate of Incorporation permits the Board of Directors without
stockholder approval to issue up to 10,000,000 shares of preferred stock (20,000 of these shares have been designated as Series A
Preferred, of which 6,305 are outstanding, 600 of these shares have been designated as Series B Preferred, of which 265 are
outstanding, and one special voting preferred share is designated and outstanding) and to fix the designation, power, preferences,
and rights of the shares and preferred stock. Furthermore, the Board of Directors has the ability to increase the size of the Board
and fill newly created vacancies without stockholder approval. These provisions could limit the price that investors might be
willing to pay in the future for shares of the Company’s common stock.
 
Our
common stock could become subject to the SEC’s penny stock rules and accordingly, broker-dealers may experience difficulty in completing
customer transactions and trading activity in our securities may be adversely affected.
 
The
SEC has adopted regulations, which generally define “penny stock” to be an equity security that has a market price of less
than $5.00 per share, subject to specific exemptions. The market price of our common stock is less than $5.00 per share and therefore
would be a “penny stock” according to SEC rules, unless we are listed on a national securities exchange. Under these rules,
broker-dealers who recommend such securities to persons other than institutional accredited investors must:
 
●
Make a special written suitability determination for the purchaser;
 
●
Receive the purchaser’s prior written agreement to the transaction;
 
●
Provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks”
and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and
 
●
Obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk
disclosure document before a transaction in a “penny stock” can be completed.
 
If
our common stock became subject to these rules, broker-dealers may find it difficult to effectuate customer transactions and trading
activity in our securities may be adversely affected. As a result, the market price of our securities may be depressed, and you may find
it more difficult to sell your securities.
 

34
 

 
We
have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to
the value of our stock.
 
We
have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable
future and any return on investment may be limited to the value of our common stock. We plan to retain any future earning to finance
growth.
 
Risks
Related to Intellectual Property
 
We
have no utility patent protection, and have only limited design patent protection and rely on unregistered copyright and trade secret
protection, if we are unable to obtain and maintain patent protection for our products, our competitors could develop and commercialize
products and technology similar or identical to ours, and our ability to successfully commercialize our existing products and any products
we may develop, and our technology may be adversely affected.
 
Any
failure to obtain or maintain sufficient intellectual property protection with respect to our current and planned products could have
a material adverse effect on our business, financial condition, and results of operations.
 
We
rely on trade secret protection to protect proprietary know-how that may not be patentable or that we elect not to patent, processes
for which patents may be difficult to obtain or enforce, and any other elements of our products and services that involve proprietary
know-how, information or technology that is not covered by patents. However, trade secrets can also be difficult to protect. If the steps
taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating
any trade secrets. Misappropriation or unauthorized disclosure of our trade secrets could significantly affect our competitive position
and may have a material adverse effect on our business. Furthermore, trade secret protection does not prevent competitors from independently
developing similar technology. To the extent we also rely on copyright protection, it, too, does not prevent competitors from independently
developing similar technology.
 
Even
if we were to obtain additional patent protection, such patents may not issue in a form that will provide us with any meaningful protection,
prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any patents
that we own may be challenged, narrowed, circumvented, or invalidated by third parties. Consequently, we do not know whether our products
will be protectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent
our intellectual property by developing similar or alternative technologies or products in a non-infringing manner which could materially
adversely affect our business, financial condition, results of operations and prospects.
 
The
Company has made and will continue to make decisions regarding what patents and trademarks and other intellectual property to pursue
and maintain in is business judgment balanced against the cost of obtaining and maintaining that IP.
 
We
may not be able to protect our intellectual property and proprietary rights throughout the world.
 
Third
parties may attempt to commercialize competitive products or services in foreign countries where we do not have any patents or patent
applications where legal recourse may be limited. This may have a significant commercial impact on our foreign business operations.
 
We
may become involved in intellectual property litigation either due to claims by others that we are infringing their intellectual property
rights or due to our own assertions that others are infringing upon our intellectual property rights.
 
We
have not done any investigation of and thus cannot provide assurance that our products or methods do not infringe the patents or other
intellectual property rights of third parties.
 
If
our business is successful, the possibility may increase that others will assert infringement claims against us.
 

35
 

 
Infringement
and other intellectual property claims and proceedings brought against us, whether successful or not, could result in substantial costs
and harm to our reputation. Such claims and proceedings can also distract and divert management and key personnel from other tasks important
to the success of the business. We cannot be certain that we will successfully defend against allegations of infringement of patents
and intellectual property rights of others. In the event that we become subject to a patent infringement or other intellectual property
lawsuit and if the other party’s patents or other intellectual property were upheld as valid and enforceable and we were found
to infringe the other party’s patents or violate the terms of a license to which we are a party, we could be required to do one
or more of the following:
 


 
●
cease
    selling or using any of our products that incorporate the asserted intellectual property, which would adversely affect our revenue;

 
●
pay
    substantial damages for past use of the asserted intellectual property;

 
●
obtain
    a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all,
    and which could reduce profitability; and

 
●
redesign
    or rename, in the case of trademark claims, our products to avoid violating or infringing the intellectual property rights of third
    parties, which may not be possible and could be costly and time-consuming if it is possible to do so.

 
Third-party
claims of intellectual property infringement, misappropriation or other violation against may also prevent or delay the sale and marketing
of our products.
 
We
may also be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of
their current or former employers or claims asserting ownership of what we regard as our own intellectual property.
 
If
we fail in defending any such claims, it could have a material adverse effect on our business, financial condition, and results of operations.
Even if we are successful in defending against such claims, litigation could result in substantial costs to us and be a distraction to
management.
 
If
our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest
and our business may be adversely affected. None identified.
 
Our
trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be violating or infringing
on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition
among potential partners or customers in our markets of interest. At times, competitors or other third parties may adopt trade names
or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition,
there could be potential trade name or trademark infringement or dilution claims brought by owners of other trademarks. Over the long
term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively
and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets,
domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources
and could adversely affect our business, financial condition, and results of operations.
 
ITEM
1B. UNRESOLVED STAFF COMMENTS
 
Not
applicable.
 

ITEM 1C. CYBERSECURITY
 
We have established
policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes
into our overall risk management systems and processes. We routinely assess material risks from cybersecurity threats, including any
potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality,
integrity, or availability of our information systems or any information residing therein.
 
We
conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our
business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments include
identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such
risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
 
Following these risk
assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified
gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. Primary responsibility for assessing, monitoring
and managing our cybersecurity risks rests with Vice President of Technology, who reports to our Chief Executive Officer, to manage   the
risk assessment and mitigation process.
 
We engage consultants,
or other third parties in connection with our risk assessment processes. These service providers assist us to design and implement our
cybersecurity policies and procedures, as well as to monitor and test our safeguards. We require each third-party service provider to
certify that it has the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement
and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security
measures that may affect our company.
 
We have not encountered
cybersecurity challenges that have materially impaired our operations or financial standing.
 
Governance
 
Our
board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The board of
directors’ audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight
and mitigation of risks from cybersecurity threats.
 
Our
cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including the information
technology team at the direction of our Vice President of Technology. Our executive team including our Chief Executive Officer, and Chief
Financial Officer are responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s
overall risk management strategy, and communicating key priorities to relevant personnel. This executive team is responsible for approving
budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other
security-related reports.
 
Our
cybersecurity incident response and vulnerability management policies are designed to escalate certain cybersecurity incidents to members
of management depending on the circumstances, including our Chief Executive Officer, and Chief Financial Officer. In addition, the Company’s
incident response and vulnerability management policies include reporting to the audit committee of the board of directors for certain
cybersecurity incidents including significant breaches to the Company’s networks or systems. The audit committee receives regular
reports from the information technology team concerning the Company’s significant cybersecurity threats and risk and the processes
the Company has implemented to address them. The audit committee also has access to the Vice President of Technology, to receive various
reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
 
ITEM
2. PROPERTIES
 
Our
principal executive office is located in leased premises of approximately 8,300 square feet at 203 Redwood Shores Parkway, Suite 600,
Redwood City, California. We believe that these facilities are adequate for our needs, including providing the space and infrastructure
to accommodate our development work based on our current operating plan. We do not own any real estate.
 
ITEM
3. LEGAL PROCEEDINGS
 
From
time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may
harm business.
 
We
are not currently a party in any material legal proceeding or governmental regulatory proceeding.
 
ITEM
4. MINE SAFETY DISCLOSURES.
 
Not
applicable.
 


36
 


 

PART
II
 
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
 
Market
for our Common Stock
 
Our
common stock is traded on NASDAQ under the symbol “BTCY” since August 26, 2021. Prior to that, our common stock was quoted
on the OTCQB marketplace under the symbol “BTCY”. On March 31, 2024 the closing price of our common stock as reported on
NASDAQ was $1.48 per share.
 
Shareholders
of Record
 
As
of June 25, 2024, an aggregate of 21,484,396
shares of the Company’s
common stock were issued and outstanding and owned by approximately 146 named shareholders of record. As
of June 25, 2024, 160,672 Exchangeable Shares were
also issued and outstanding and held by approximately 10 holders of record. The numbers of record holders do not include beneficial owners
holding shares through nominee names.
 
As
of June 25, 2024 there is also one share of the Special Voting Preferred Stock issued and outstanding, held by the Trustee, and 200
Series A preferred shares issued and outstanding and owned by 2 shareholders.
 
Dividends
 
Our
Series A preferred shares earning dividends at the rate of 12% per annum. We do not anticipate paying any cash dividends on our common
shares in the foreseeable future and we intend to retain all of our earnings, if any, to finance our growth and operations and to fund
the expansion of our business. Payment of any dividends will be made in the discretion of our Board of Directors, after our taking into
account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion.
No dividends may be declared or paid on our common shares, unless a dividend, payable in the same consideration or manner, is simultaneously
declared or paid, as the case may be, on our shares of preferred stock, if any.
 
Issuance
of Securities
 
During
the year ended March 31, 2024, the Company issued 612,062 common shares for conversion of preferred shares. The Company issued 83,786
shares for exchangeable shares that were exchanged into common shares. The Company issued 92,125 common shares for services provided.
The Company issued 36,897 common shares for private placement. Lastly, the Company issued 20,846 shares to adjust for the rounding effect
of the Reverse Split.
 
The
securities referenced above were offered and sold pursuant to Section 4(a)(2) of the Securities Act.
 
Securities
Authorized for Issuance under Equity Compensation Plans
 
We
adopted an equity incentive plan effective as of February 2, 2016 to attract and retain employees, directors and consultants. The equity
incentive plan is administered by our Board of Directors which may determine, among other things, the (a) terms and conditions of any
option or stock purchase right granted, including the exercise price and the vesting schedule, (b) persons who are to receive options
and stock purchase rights and (c) the number of shares to be subject to each option and stock purchase right. The equity incentive plan
may also be administered by a special committee, as determined by the Board of Directors.
 
The
maximum aggregate number of shares of our common stock that may be issued under the equity incentive plan is 1,241,422, which, except
as provided in the plan shall automatically increase on January 1 of each year for no more than 10 years, so the number of shares that
may be issued is an amount no greater than 15% of our outstanding shares of common stock and Exchangeable Shares as of such January 1.
The equity incentive plan provides for the grant of, among other awards, (i) “incentive” options (qualified under section
422 of the Internal Revenue Code of 1986, as amended) to our employees and (ii) non-statutory options and restricted stock to our employees,
directors or consultants.

 

37
 


 
On
March 31, 2023, we adopted the Company’s 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan authorizes grants
of equity-based and incentive cash awards to eligible participants designated by the 2023 Plan’s administrator. The 2023 Plan will
be administered by the Compensation Committee of the Company’s Board of Directors (the “Board”). An aggregate of 5,000,000
shares of the Company’s common stock (the “Common Stock”), plus the number of shares available for issuance under the
Company’s 2016 Equity Incentive Plan that had not been made subject to outstanding awards, were reserved for issuance under the
2023 Plan. Unless earlier terminated by the Board, the 2023 Plan will remain in effect until all Common Stock reserved for issuance has
been issued, provided, however, that all awards shall be granted, if at all, on or before the day immediately preceding the tenth (10th)
anniversary of the effective date of the 2023 Plan. We also adopted the Company’s Employee Stock Purchase Plan (the “ESPP”).
The ESPP allows eligible employees of the Company and the Company’s designated subsidiaries the ability to purchase shares of the
Company’s Common Stock at a discount, subject to various limitations. Under the ESPP, employees will be granted the right to purchase
Common Stock at a discount during a series of successive offerings, the duration and timing of which will be determined by the ESPP administrator
(the “Administrator”). In no event can any single offering period be longer than 27 months. The purchase price (the “Purchase
Price”) for each offering will be established by the Administrator. With respect to an offering under Section 423 of the Internal
Revenue Code of 1986 (“Section 423 Offering”), in no case may such Purchase Price be less than the lesser of (i) an amount
equal to 85 percent of the fair market value on the commencement date, or (ii) an amount not less than 85 percent of the fair market
value the on the purchase date. In the event of financial hardship, an employee may withdraw from the ESPP by providing a request at
least 20 Business Days before the end of the offering period (the “Offering Period”). Otherwise, the employee will be deemed
to have exercised the purchase right in full as of such exercise date. Upon exercise, the employee will purchase the number of whole
shares that the participant’s accumulated payroll deductions will buy at the Purchase Price. If an employee wants to decrease the
rate of contribution, the employee must make a request at least 20 Business Days before the end of an Offering Period (or such earlier
date as determined by the Administrator). An employee may not transfer any rights under the ESPP other than by will or the laws of descent
and distribution. During a participant’s lifetime, purchase rights under the ESPP shall be exercisable only by the participant.
 
There
were no issuances from the new 2023 Plan as of March 31, 2024. Shown below is information as of March 31, 2024 with respect to the common
stock of the Company that may be issued under its equity compensation plans.
 


Plan Category 
(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights  
(b) Weighted- average exercise price of outstanding options, warrants and rights  
(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) 

Equity compensation plans approved by security holders (1) 
 1,239,634  
$9.3889  
 5,001,788 

  
    
    
   

Equity compensation plans not approved by security holders (2) 
    
    
   

  
    
    
   

Directors, Officers and  Employees Stock Option Plan (3) 
    
    
   

  
    
    
   

Warrants granted to Directors and Officers (4) 
 242,882  
$6.3987  
 - 

  
    
    
   

Total 
 1,499,423  
    
 5,001,788 

 

38
 

 


 
(1)
Represents
the Company’s 2016 Equity Incentive Plan and includes options to purchase an aggregate of 416,664 shares of our common stock
granted to Mr. Al-Siddiq pursuant to his employment agreement at an exercise price of $13.2, and a grant to Mr. Al-Siddiq of 233,334
options in April 2020 which would vest quarterly over four years and have an exercise price of $6.3 per share, as well as additional
two grants to Mr. Al-Siddiq of 58,334 options each on March 12, 2023, with an exercise price of $7.5 and $10.5 per share respectively
for each grant, out of which 29,167 options from each grant (in total 58,334) had vested immediately upon grant date, and
the remaining 29,167 options from each grant (in total 58,334) vested on March 12, 2024. A further grant was made to Mr.
Al-Siddiq of 166,695 options on March 12, 2023, with an exercise price of $4.86 per share, out of which 41,667 options had vested immediately
upon grant and the rest will vest monthly over 36 months.

 


 
(2)
At
    the time of the Acquisition Transaction on February 2, 2016, each (a) outstanding option granted or issued pursuant to
    iMedical’s existing equity compensation plan was exchanged for approximately 0.1995 economically equivalent replacement options
    with a corresponding adjustment to the exercise price and (b) outstanding warrant granted or issued pursuant to iMedical’s
    equity compensation plans was adjusted so the holder receives approximately 0.1995 shares of common stock with a corresponding adjustment
    to the exercise price. Does not include options granted to Mr. Al-Siddiq discussed in (1) above.

 
 
 

 
(3)
On
    March 30, 2015, iMedical approved Directors, Officers and Employees Stock Option Plan, under which it authorized and
    issued 500,000 options. This plan was established to enable the Company to attract and retain the services of highly qualified and
    experience directors, officers, employees and consultants and to give such person an interest in the success of the Company. As of
    March 31, 2018, there were 22,919 outstanding options at an exercise price of $.0006 under this plan. These options represented the
    right to purchase 27,432 shares of the Company’s common stock using the ratio of 1.1969:1. All of these options were exercised
    during the year ended March 31, 2019. No other grants will be made under this plan.

 
 
 

 
(4)
This
    category relates to individuals who, at the time of grant, were not part of the Company’s 2016 Equity Incentive Plan.

 
ITEM
6. [RESERVED]
 
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The
following Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“MD&A”) covers information pertaining to the Company up to March 31, 2024 and should be read in
conjunction with our consolidated financial statements and related notes of the Company as of and for the fiscal years ended March
31, 2024 and 2023 contained elsewhere in this Annual Report on Form 10-K. Except as otherwise noted, the financial information
contained in this MD&A and in the financial statements has been prepared in accordance with accounting principles generally
accepted in the United States of America. All amounts are expressed in U.S. dollars unless otherwise noted.
 
Forward
Looking Statements
 
Certain
information contained in this MD&A and elsewhere in this Annual Report on Form 10-K includes “forward-looking statements.”
Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity,
financial condition and results of operations, prospects and opportunities and are based upon information currently available to us and
our management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including
many assumptions regarding future events. Actual results, performance, liquidity, financial condition and results of operations, prospects
and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements
as a result of various risks, uncertainties and other factors, including those risks described in detail in the section entitled “Risk
Factors” as well as elsewhere herein.
 


39
 

 
Forward-looking
statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use
of the words “may,” “should,” “would,” “will,” “could,” “scheduled,”
“expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,”
or “project” or the negative of these words or other variations on these words or comparable terminology.
 
In
light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance
that the forward-looking statements contained in this section and elsewhere in herein will in fact occur. Potential investors should
not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no
undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed
circumstances or any other reason.
 
Company
Overview
 
Biotricity
Inc. (the “Company”, “Biotricity”, “we”, “us”, “our”) is a medical technology
company focused on biometric data monitoring solutions. Our aim is to deliver innovative, remote monitoring solutions to the medical,
healthcare, and consumer markets, with a focus on diagnostic and post-diagnostic solutions for lifestyle and chronic illnesses. We approach
the diagnostic side of remote patient monitoring by applying innovation within existing business models where reimbursement is established.
We believe this approach reduces the risk associated with traditional medical device development and accelerates the path to revenue.
In post-diagnostic markets, we intend to apply medical grade biometrics to enable consumers to self-manage, thereby driving patient compliance
and reducing healthcare costs. We intend to first focus on a segment of the diagnostic mobile cardiac telemetry market, otherwise known
as COM, while providing our chosen markets with the capability to also perform other cardiac studies.
 
We
developed our FDA-cleared Bioflux® COM technology, comprised of a monitoring device and software components, which we made
available to the market under limited release on April 6, 2018, in order to assess, establish and develop sales processes and market
dynamics. The fiscal year ended March 31, 2021 marked the Company’s first year of expanded commercialization efforts, focused
on sales growth and expansion. In 2021, the Company announced the initial launch of Bioheart, a direct-to-consumer heart monitor
that offers the same continuous heart monitoring technology used by physicians. In addition to developing and receiving regulatory
approval or clearance of other technologies that enhance its ecosystem, in 2022, the Company announced the launch of its Biocore
Cardiac Monitoring Device (“Biocore”, previously branded as Biotres), a three-lead device for ECG and arrhythmia
monitoring intended for lower risk patients, a much broader addressable market segment. We have since expanded our sales efforts to
35 states, with intention to expand further and compete in the broader US market using an insourcing business model. Our technology
has a large potential total addressable market, which can include hospitals, clinics and physicians’ offices, as well as other
Independent Diagnostic Testing Facilities (“IDTFs)”. We believe our solution’s insourcing model, which empowers
physicians with state-of-the-art technology and charges technology service fees for its use, has the benefit of a reduced operating
overhead for the Company, and enables a more efficient market penetration and distribution strategy.
 
We
are a technology company focused on earning utilization-based recurring technology fee revenue. The Company’s ability to grow this
type of revenue is predicated on the size and quality of its sales force and their ability to penetrate the market and place devices
with clinically focused, repeat users of its cardiac study technology. The Company plans to grow its sales force in order to address
new markets and achieve sales penetration in the markets currently served.
 
Full
market release of the Bioflux COM device for commercialization launched in April 2019, after receiving its second and final required
FDA clearance. To commence commercialization, we ordered device inventory from our FDA-approved manufacturer and hired a small, captive
sales force, with deep experience in cardiac technology sales; we expanded on our limited market release, which identified potential
anchor clients who could be early adopters of our technology. By increasing our sales force and geographic footprint, we had launched
sales in 31 U.S. states by December 31, 2022.
 

40
 

 
On
January 24, 2022 the Company announced that it has received the 510(k) FDA clearance of its Biocore patch solution, which is a novel
product in the field of Holter monitoring. This three-lead technology can provide connected Holter monitoring that is designed to produce
more accurate arrythmia detection than is typical of competing remote patient monitoring solutions. It is also foundational, since already
developed improvements to this technology will follow which are not known by the Company to be currently available in the market, for
clinical and consumer patch solution applications.
 
During
2021, the Company also announced that it received a 510(k) clearance from the FDA for its Bioflux Software II System, engineered to improve
workflows and reduce estimated analysis time from 5 minutes to 30 seconds. ECG monitoring requires significant human oversight to review
and interpret incoming patient data to discern actionable events for clinical intervention, highlighting the necessity of driving operational
efficiency. This improvement in analysis time reduces operational costs and allows the Company to continue to focus on excellent customer
service and industry-leading response times to physicians and their at-risk patients. Additionally, these advances mean we can focus
our resources on high-level operations and sales.
 
The
Company has also developed or is developing several other ancillary technologies, which will require application for further FDA clearances,
which the Company anticipates applying for within the next to twelve months. Among these are:
 


 
●
advanced
    ECG analysis software that can analyze and synthesize patient ECG monitoring data with the purpose of distilling it down to the important
    information that requires clinical intervention, while reducing the amount of human intervention necessary in the process;

 
 
 

 
●
the
    Bioflux® 2.0, which is the next generation of our award winning Bioflux®

 
During
2021 and the early part of 2022, the Company has also commercially launched its Bioheart technology, which is a consumer technology whose
development was forged out of prior the development of the clinical technologies that are already part of the Company’s technology
ecosystem, the BioSphere. In recognition of its product development, in November 2022, the Company’s Bioheart received recognition
as one of Time Magazine’s Best Inventions of 2022.
 
The
COVID-19 pandemic has highlighted the importance of telemedicine and remote patient monitoring technologies. During
the twelve months ended March 31, 2023, the Company continued to develop its telemedicine platform, with capabilities of real-time streaming
of medical devices. Telemedicine offers patients the ability to communicate directly with their health care providers without
the need of leaving their home. The introduction of a telemedicine solution is intended to align with the Company’s Bioflux product
and facilitate remote visits and remote prescriptions for cardiac diagnostics, but it will also serve as a means of establishing referral
and other synergies across the network of doctors and patients that use the technologies we are building within the Biotricity ecosystem.
The intention is to continue to provide improved care to patients that may otherwise elect not to go to medical facilities and continue
to provide economic benefits and costs savings to healthcare service providers and payers that reimburse. The Company’s goal is
to position itself as an all-in-one cardiac diagnostic and disease management solution. The Company continues to grow its data set of
billions of patient heartbeats, allowing it to further develop its predictive capabilities relative to atrial fibrillation and arrythmias.
 
In
October 2022, the Company launched its Biocare Cardiac Disease Management Solution, after successfully piloting this technology in two
facilities that provide cardiac care to more than 60,000 patients. This technology and other consumer technologies and applications such
as the Biokit and Biocare have been developed to allow the Company to transform and use its strong cardiac footprint to expand into remote
chronic care management solutions that will be part of the BioSphere. The technology puts actionable data into the hands of physicians
in order to assist them in making effective treatment decisions quickly. During March 2023, the Company launched its patient-facing Biocare
app on Android and Apple app stores. This further allows the Company to expand its footprint in providing full-cycle chronic care management
solutions to its clinic and patient network.
 

41
 

 
The
Company identified the importance of recent developments in accelerating its path to profitability, including the launch of important
new products identified, which have a ready market through cross-selling to existing large customer clinics, and large new distribution
partnerships that allow the Company to sell into large hospital networks. Additionally, in September 2022, the Company was awarded a
NIH Grant from the National Heart, Blood, and Lung Institute for AI-Enabled real-time monitoring, and predictive analytics for stroke
due to chronic kidney failure. This is a significant achievement that broadens our technology platform’s disease space demographic.
The grant focusses on Bioflux-AI as an innovative system for real-time monitoring and prediction of stroke episodes in chronic kidney
disease patients. The Company received $238,703 under this award in March 2023, used to defray research, development and other associated
costs.
 
Results
of Operations
 
Biotricity
incurred a net loss attributed to common stockholders of $14,928,960 (loss per share of $1.66) during the year ended March 31, 2024
as compared to $19,533,683 (loss per share $2.256) during the year ended March 31, 2023. From the Company’s inception in 2009 through
March 31, 2024, the Company has generated an accumulated deficit of $127,499,785. We devoted, and expect to continue to devote, significant
resources in the areas of sales and marketing and research and development costs. We also expect to incur additional operating losses,
as we build the infrastructure required to support higher sales volume.
 
Comparison
of the Fiscal Years and the Three Months Periods Ended March 31, 2024 and 2023
 
The
following table sets forth our results of operations for the fiscal years ended March 31, 2024 and 2023.
 


  
For the years ended March 31, 

  
2024  
2023  
Period to
 Period Change 

  
   
   
  

Revenue 
 12,063,345  
 9,639,057  
 2,424,288 

Cost of Revenue 
 3,707,064  
 4,197,024  
 (489,960)

Gross profit 
 8,356,281  
 5,442,033  
 2,914,248 

  
 69.3% 
 56.5% 
 12.8%

Operating expenses: 
    
    
   

Selling, general and administrative expenses 
 14,612,724  
 17,621,865  
 (3,009,141)

Research and development expenses 
 2,571,826  
 3,229,879  
 (658,053)

Total operating expenses 
 17,184,550  
 20,851,744  
 (3,667,194)

Loss from operations 
 (8,828,269) 
 (15,409,711) 
 6,581,442 

Interest expense 
 (3,018,803) 
 (1,839,159) 
 (1,179,644)

Accretion expense including day one derivative loss 
 (2,172,920) 
 (743,459) 
 (1,429,461)

Change in fair value of derivative liabilities 
 9,777  
 (483,873) 
 493,650 

Gain/(Loss) upon convertible promissory note conversion and redemption 
 18,539  
 (71,119) 
 89,658 

Other (expense) income 
 (102,607) 
 (110,822) 
 8,215 

Net loss before income taxes 
 (14,094,283) 
 (18,658,143) 
 4,563,860 

  
    
    
   

Income taxes 
 —  
 —  
   

Net loss before dividends 
 (14,094,283) 
 (18,658,143) 
 4,563,860 

 

42
 

 
The
following table sets forth our results of operations for the three months ended March 31, 2024 and 2023.
 


  
For the 3 months ended March
    31, 

  
2024  
2023  
Period to
 Period Change 

  
   
   
  

Revenue 
 3,178,311  
 2,742,435  
 435,876 

Cost of Revenue 
 905,998  
 1,207,734  
 (301,736)

Gross profit 
 2,272,313  
 1,534,701  
 737,612 

  
 71.5% 
 56.0% 
 12.8%

Operating expenses: 
    
    
  

Selling, general and administrative expenses 
 4,608,374  
 4,284,977  
 323,397 

Research and development expenses 
 708,275  
 703,329  
 4,946

Total operating expenses 
 5,316,649  
 4,988,306  
 328,343 

Loss from operations 
 (3,044,336) 
 (3,453,605) 
 409,269 

Interest expense 
 (814,943) 
 (665,350) 
 (149,593)

Accretion expense including day one derivative loss 
 (596,575) 
 (559,956) 
 (36,619)

Change in fair value of derivative liabilities 
 253,791  
 (13,902) 
 267,693 

Gain/(Loss) upon convertible promissory note conversion and redemption 
 3,259  
 14,418  
 (11,159)

Other (expense) income 
 16,334  
 6,167  
 10,167 

Net loss before income taxes 
 (4,182,470) 
 (4,672,228) 
 489,758 

  
    
    
   

Income taxes 
 —  
 —  
   

Net loss before dividends 
 (4,182,470) 
 (4,672,228) 
 489,758 

 
Revenue
and cost of revenue
 
Through the efforts of our sales force to increase
our geographic footprint, we have launched sales in 35 U.S. states by March 31, 2024. The Company earned combined device sales and technology
fee income totaling $12.1 million during the year ended March 31, 2024, a 25.2% increase over the $9.6 million earned in the preceding
fiscal year. During three months ended March 31, 2024, the Company earned total sales of $3.2 million, a 15.9% increase over the $2.7
million sales earned in the corresponding quarter in prior year.
 
Our gross profit percentage was 69.3% during the year ended March 31, 2024
as compared to 56.5% during the comparable prior year period. The increase in average margins was a result of increase of technology sales
as a percentage of total sales, since these enjoy a higher margin than device sales. Gross margin on technology sales was 75% for the
year ended March 31, 2024, which improved significantly from the prior year technology sales gross margin of 69%, as a result of the Company’s
continuous efforts to improve efficiency in delivering those services. We expect the gross margin related to technology fees to continue
improving going forward as we achieve greater economy of scale, including the cost of monitoring. Given the improved gross margin on technology
fees and an evolving revenue mix where technology fees are expected to comprise an increasing proportion of revenue, we anticipate continued
improvement in overall blended gross margin over time.
 
Gross
profit percentage was 71.5% during three months ended March 31, 2024 as compared to 56% in the corresponding quarter in the prior year.
This was mainly a result of increased study revenue from an increased number of studies performed at a lower cost of revenue due to economy
of scale and continued efforts to reduce the cost per study.
 
Operating
Expenses
 
Total
operating expenses for the fiscal year ended March 31, 2024 were $17.2 million compared to $20.9 million for the fiscal year ended March
31, 2023. Total operating expenses for the three months ended March 31, 2024 were $5.3 million as compared $5 million for the three months
ended March 31, 2023. See further explanations below.
 

43
 

 
Selling,
General and administrative expenses
 
Our
selling, general and administrative expenses for the fiscal year ended March 31, 2024 decreased to $14.6 million, compared to
approximately $17.6 million for the fiscal year ended March 31, 2023 and increased to $4.6 million for the three months ended March
31, 2024 compared to and $4.3 million during the three months ended March 31, 2023. Our total selling, general and administrative
expenses decreased by $3 million for the fiscal year ended March 31, 2024, which was primarily due increased monitoring of spending
efficiency over sales commissions and fixed general and administrative expenses.
 
Research
and development expenses
 
During
the fiscal year and three months ended March 31, 2024 we recorded research and development expenses of $2.6 million and $0.7 million,
respectively, compared to $3.2 million and $0.7 million incurred in the fiscal year and three months ended March 31, 2023. The research
and development activity related to both existing and new products. The decrease in research and development activity was a result of
increased monitoring of spending efficiency over our development of new technologies for our ecosystem and product enhancements.
 
Interest
Expense
 
During
the fiscal year ended March 31, 2024 and March 31, 2023, we incurred interest expenses of $3 million and $0.8 million, respectively.
During three months ended March 31, 2024 and March 31, 2023, we incurred interest expenses of $0.8 million and $0.6 million, respectively.
The increase in interest expense corresponded to an increase in borrowings and market increases in interest rates period over period.
 
Accretion
and amortization expenses
 
During
the fiscal year ended March 31, 2024 and March 31, 2023, we incurred accretion expense of $2.2 million and $0.7 million, respectively.
The increase from the prior year period corresponded with an increase in borrowings. The amortization during the current year related
primarily to the amortization of debt discount related to the Company’s term loan, merchant loans and series C convertible notes.
During the three months ended March 31, 2024 and March 31, 2023, we incurred accretion expenses of $0.6 million. The expense for the
quarters are comparable due to an increase as a result of debt discount amortization related to new convertible notes entered towards
the end of the prior fiscal year.
 
Change
in fair value of derivative liabilities
 
During
the year ended March 31, 2024 and March 31, 2023, the Company recognized $10 thousand and $483 thousand, respectively, related to the
change in fair value of derivative liabilities. During the three months ended March 31, 2024 and March 31, 2023, the Company recognized
$254 thousand and $14 thousand, respectively, related to the change in fair value of derivative liabilities.
 
Loss
upon convertible promissory notes conversion
 
During
the year ended March 31, 2024, we recorded a gain of $19 thousand, compared to a loss of $71 thousand during the year ended March 31,
2024, related to the redemption of our convertible promissory notes  . During the three months ended March 31, 2024 and 2023,
we recorded a gain of $3 thousand and $14 thousand, respectively, related to the redemption of our convertible promissory notes.
 
Other
(expense) income
 
During
the years ended March 31, 2024, and March 31, 2023 we recognized $103 thousand and $111 in net other expense. The change in net other
(expense) income is mainly a result of loss upon debt extinguishments and the financing component of revenue recognized as interest (note
3). During the three months ended March 31, 2024, and March 31, 2023, we recognized $16 thousand and $6 thousand, respectively, in net
other income.
 

44
 

 
EBITDA
and Adjusted EBITDA
 
Earnings
before interest, taxes, depreciation and amortization expenses (EBITDA) and Adjusted EBITDA, which are presented below, are non-generally
accepted accounting principles (non-GAAP) measures that we believe are useful to management, investors and other users of our financial
information in evaluating operating profitability. EBITDA is calculated by adding back interest, taxes, depreciation and amortization
expenses to net income.
 
Adjusted
EBITDA is calculated by excluding from EBITDA the effect of the following non-operational items: equity in earnings and losses of unconsolidated
businesses and other income and expense, net, as well as the effect of special items that related to one-time, non-recurring expenditures
. We believe that this measure is useful to management, investors and other users of our financial information in evaluating the effectiveness
of our operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.
Further, the exclusion of non-operational items and special items enables comparability to prior period performance and trend analysis.
See notes in the table below for additional information regarding special items.
 
It
is management’s intent to provide non-GAAP financial information to enhance the understanding of Biotricity’s GAAP financial
information, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance
with GAAP. We believe that providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other
users of our financial information to more fully and accurately assess business performance. The non-GAAP financial information presented
may be determined or calculated differently by other companies and may not be directly comparable to that of other companies.
 



EBITDA and Adjusted EBITDA

  
Year ended
 March 31,
2024  
Year ended
 March 31,
2023  
3 months ended
March 31,
2024  
3 months ended
March 31,
2023 

  
$  
$  
$  
$ 

Net loss attributable to common stockholders 
 (14,928,960) 
 (19,533,683) 
 (4,400,104) 
 (4,857,438)

Add: 
    
    
    
   

Provision for income taxes 
 -  
 -  
 -  
 - 

Interest expense 
 3,018,803  
 1,839,159  
 814,943  
 665,350 

Accretion and amortization expenses 
 2,178,873  
 747,924  
 598,063  
 561,445 

Preferred stock dividends (2) 
 834,677  
 875,540  
 217,634  
 185,210 

EBITDA 
 (8,896,607) 
 (16,071,060) 
 (2,769,464) 
 (3,445,433)

  
    
    
    
   

Add (Less) 
    
    
    
   

Share based compensation (1) 
 1,025,930  
 647,631  
 481,275  
 281,978 

Other (income)/loss (3) 
 102,607  
 110,822  
 (16,334) 
 (6,167)

Gain (loss) upon convertible promissory notes conversion and redemption (3) 
 (18,539) 
 71,119  
 (3,259) 
 (14,418)

Fair value change on derivative liabilities (3) 
 (9,777) 
 483,873  
 (253,791) 
 13,902 

Adjusted EBITDA 
 (7,796,386) 
 (14,757,615) 
 (2,561,573) 
 (3,170,138)

  
    
    
    
   

Weighted average number of common shares outstanding 
 8,991,766  
 8,659,718  
 9,441,667  
 8,732,199 

  
    
    
    
   

Adjusted Loss per Share, Basic and Diluted 
 (0.867) 
 (1.704) 
 (0.271) 
 (0.363)

 
(1)
Share based compensation is a non-cash item therefore is removed from our adjusted EBITDA analysis
(2)
Preferred stock dividend payment is at Company’s discretion and therefore is removed from our adjusted EBITDA analysis
(3)
These items relate to financing transactions and therefore do not reflect the Company’s core operating activities
(4) Certain amounts presented in the prior year period have been reclassified to conform to current period presentation.
 

45
 

 
Net
Loss
 
As
a result of the foregoing, the net loss attributable to common stockholders for the fiscal year ended March 31, 2024 was $14.9 million
compared to a net loss of $19.5 million during the fiscal year ended March 31, 2023.
 
Translation
Adjustment
 
Translation
adjustment for the fiscal year ended March 31, 2024 was a gain of $185 thousand compared to a gain of $616 thousand for the fiscal year
ended March 31, 2023. Translation adjustment was a gain of $284 thousand for the three months ended March 31, 2024, compared to a loss
of $10 thousand for the three months ended March 31, 2023. This translation adjustment represents gains and losses that result from the
translation of currency in the financial statements from our functional currency of Canadian dollars to the reporting currency in U.S.
dollars over the course of the reporting period.
 
Global
Economic Conditions
 
Generally,
worldwide economic conditions remain uncertain, particularly due to the effects of the COVID-19 pandemic and increased inflation. The
general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past and at times have adversely
affected our access to capital and increased the cost of capital. The capital and credit markets may not be available to support future
capital raising activity on favorable terms. If economic conditions decline, our future cost of equity or debt capital and access to
the capital markets could be adversely affected.
 
The
COVID-19 pandemic that began in late 2019 introduced significant volatility to the global economy, disrupted supply chains and had a
widespread adverse effect on the financial markets. Additionally, our operating results could be materially impacted by changes in the
overall macroeconomic environment and other economic factors. Changes in economic conditions, supply chain constraints, logistics challenges,
labor shortages, the conflict in Ukraine, and steps taken by governments and central banks, particularly in response to the COVID-19
pandemic as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has
caused changes in fiscal and monetary policy, including increased interest rates.
 
Liquidity
and Capital Resources
 
Management
has noted the existence of substantial doubt about our ability to continue as a going concern. Additionally, our independent registered
public accounting firm included an explanatory paragraph in the report on our financial statements as of and for the years ended March
31, 2024 and 2023, respectively, noting the existence of substantial doubt about our ability to continue as a going concern. Our existing
cash deposits may not be sufficient to fund our operating expenses through at least twelve months from the date of this filing. To continue
to fund operations, we will need to secure additional funding through public or private equity or debt financings, through collaborations
or partnerships with other companies or other sources. We may not be able to raise additional capital on terms acceptable to us, or at
all. Any failure to raise capital when needed could compromise our ability to execute our business plan. If we are unable to raise additional
funds, or if our anticipated operating results are not achieved, we believe planned expenditure may need to be reduced in order to extend
the time period that existing resources can fund our operations. If we are unable to obtain the necessary capital, it may have a material
adverse effect on our operations and the development of our technology, or we may have to cease operations altogether.
 
The
development and commercialization of our product offerings are subject to numerous uncertainties, and we could use our cash resources
sooner than we expect. Additionally, the process of developing our products is costly, and the timing of progress can be subject to uncertainty;
our ability to successfully transition to profitability may be dependent upon achieving further regulatory approvals and achieving a
level of product sales adequate to support our cost structure. Though we are optimistic with respect to our revenue growth trajectory
and our cost control initiatives, we cannot be certain that we will ever be profitable or generate positive cash flow from operating
activities.
 

46
 


 
The
Company is in commercialization mode, while continuing to pursue the development of its next generation COM product as well as new products
that are being developed.
 
We
generally require cash to:
 


 
●
purchase
    devices that will be placed in the field for pilot projects and to produce revenue,

 
 
 

 
●
    
launch
    sales initiatives,

 
 
 

 
●
    
fund
    our operations and working capital requirements,

 
 
 

 
●
    
develop
    and execute our product development and market introduction plans,

 
 
 

 
●
    
fund
    research and development efforts, and

 
 
 

 
●
    
pay
    any expense obligations as they come due.

 
The
Company is in the early stages of commercializing its products. It is concurrently in development mode, operating a research and development
program in order to develop an ecosystem of medical technologies, and, where required or deemed advisable, obtain regulatory approvals
for, and commercialize other proposed products. The Company launched its first commercial sales program as part of a limited market release,
during the year ended March 31, 2019, using an experienced professional in-house sales team. A full market release ensued during the
year ended March 31, 2020. Management anticipates the Company will continue on its revenue growth trajectory and improve its liquidity
through continued business development and after additional equity and debt capitalization of the Company. The Company has incurred recurring
losses from operations, and as at March 31, 2024, has an accumulated deficit of $127,499,785. On August 30, 2021 the Company completed
an underwritten public offering of its common stock that concurrently facilitated its listing on the Nasdaq Capital Market. On December
31, 2023, the Company has a working capital deficit of $14.69 million. Prior to listing on the Nasdaq Capital Market, the Company had
also filed a shelf Registration Statement on Form S-3 (No. 333-255544) with the Securities and Exchange Commission on April 27, 2021,
which was declared effective on May 4, 2021. This facilitates better transactional preparedness when the Company seeks to issue equity
or debt to potential investors, since it continues to allow the Company to offer its shares to investors only by means of a prospectus,
including a prospectus supplement, which forms part of an effective registration statement.
 
On
March 31, 2024, we had cash deposits in the aggregate of approximately $0.8 million.
 
The
Company has developed and continues to pursue sources of funding that management believes will be sufficient to support the Company’s
operating plan and alleviate any substantial doubt as to its ability to meet its obligations at least for a period of one year from the
date of these consolidated financial statements.
 
During
the fiscal year ended March 31, 2023, the Company raised short-term loans and promissory notes, net of repayments of $1,476,121 from
various lenders. The Company also raised convertible notes, net of redemptions of $2,355,318 from various lenders.

 
During the fiscal year ended March 31, 2024, the Company
raised short-term loans, net of repayments of $853,030 and convertible notes, net of redemptions of $2,962,386 from various lenders. The
Company sold 36,897 common shares through use of its registration statement, for gross proceeds of $123,347, raising a net amount of $119,285
after paying a 3% placement fee and other issuance expenses.
 
Additionally,
on September 19, 2023, the Company entered into a security purchase agreement with an institutional investor for the issuance and sale
of 220 shares of the Company’s newly designated Series B Convertible Preferred Stock, $0.001 par value (the “Series B Preferred
Stock”), at a purchase price of $9,090.91 per share of Series B Preferred Stock, or gross proceeds of $2,000,000. Net proceeds
after issuance costs amounted to $1,900,000 for the Series B Preferred Stock. During the three months ended March 31, 2024, a further
110 Series B preferred shares were issued. The net proceeds received was in the amount of $925,000.
 
Shares
of Series B Preferred Stock and shares of common stock of the Company that are issuable upon conversion of, or as dividends on, the Series
B Preferred Stock were offered and were issued pursuant to the Prospectus Supplement, filed September 19, 2023, to the Prospectus included
in the Company’s Registration Statement on Form S-3 (Registration No. 333-255544) filed with the Securities and Exchange Commission
on April 27, 2021, and declared effective May 4, 2021.
 

47
 


 
As
we proceed with the commercialization of the Bioflux, Biocore and Biocare products and continue their development, we expect to continue
to devote significant resources on capital expenditures, as well as research and development costs and operations, marketing and sales
expenditures.
 
We
expect to require additional funds to further develop our business plan, including the continuous commercialization and expansion of
the technologies that will form part of its BioSphere eco-system. Based on the current known facts and assumptions, we believe our existing
cash and cash equivalents, access to funding sources, along with anticipated near-term debt and equity financings, will be sufficient
to meet our needs for the next twelve months from the filing date of this report. We intend to seek and opportunistically acquire additional
debt or equity capital to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our
intellectual property, developing or acquiring new lines of business and enhancing our operating infrastructure. The terms of our future
financing may be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek additional funds through arrangements
with collaborators or other third parties. There can be no assurance we will be able to raise this additional capital on acceptable terms,
or at all. If we are unable to obtain additional funding on a timely basis, we may be required to modify our operating plan and otherwise
curtail or slow the pace of development and commercialization of our proposed product lines.
 
The
following is a summary of cash flows for each of the periods set forth below.
 


  
For the Years Ended 

  
March 31, 

  
2024  
2023 

Net cash used in operating activities 
$(6,693,912) 
$(13,547,935)

Net cash used in investing activities 
 —  
 — 

Net cash provided by financing activities 
 6,741,685  
 2,001,603 

Net (decrease) increase in cash 
$47,773  
$(11,546,332)

 
Net
Cash Used in Operating Activities
 
During
the fiscal year ended March 31, 2024, we used cash in operating activities in the amount of $6.7 million compared to $13.5 million for
the fiscal year ended March 31, 2023. For each of the fiscal years ended March 31, 2024 and March 31, 2023, the cash in operating activities
was primarily due to selling expenses as well as research, product development, business development, marketing and general operations.
The decrease in cash used reflects management’s concerted effort to contain costs while increasing revenues, on the path of achieving
break-even.
 
Net
Cash Used in Investing Activities
 
Net
cash used in investing activities was Nil in the fiscal years ended March 31, 2024 and March 31, 2023.
 
Net
Cash Provided by Financing Activities
 
Net
cash provided by financing activities was $6.7 million for the fiscal year ended March 31, 2024 compared to $2 million for the fiscal
year ended March 31, 2023.
 
For
the fiscal year ended March 31, 2024, the cash provided by financing activities was primarily from proceeds in connection with the issuance
of convertible notes and loans, net of repayments, in the amount of $3.8 million and the issuance of Series B convertible
preferred stock, in the amount of $2.8 million.
 
For
the fiscal year ended March 31, 2023, the cash provided by financing activities was primarily from proceeds in connection with the issuance
of convertible notes and loans, net of repayments, in the amount of $3.8 million. The financing proceeds were partially offset by the
payment of preferred stock dividends in the amount of $0.9 million and by the redemption of preferred stock in the amount of $0.9 million.
 

48
 

 
Critical
Accounting Policies
 
The
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US
GAAP”) and are expressed in United States Dollars. Significant accounting policies are summarized below:
 
Revenue
Recognition
 
The
Company adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”)
on April 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in an
amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by applying
the core principles – 1) identify the contract with a customer, 2) identify the performance obligations in the contract, 3) determine
the transaction price, 4) allocate the transaction price to performance obligations in the contract, and 5) recognize revenue as performance
obligations are satisfied.
 
The
Bioflux mobile cardiac telemetry device, a wearable device, is worn by patients for a monitoring period up to 30 days. The cardiac data
that the device monitors and collects is curated and analyzed by the Company’s proprietary algorithms and then securely communicated
to a remote monitoring facility for electronic reporting and conveyance to the patient’s prescribing physician or other certified
cardiac medical professional. Revenues earned with respect to this device are comprised of device sales revenues and technology fee revenues
(technology as a service). The device, together with its licensed software, is available for sale to the medical center or physician,
who is responsible for the delivery of clinical diagnosis and therapy. The remote monitoring, data collection and reporting services
performed by the technology culminate in a patient study that is generally billable when it is complete and is issued to the physician.
In order to recognize revenue, management considers whether or not the following criteria are met: persuasive evidence of a commercial
arrangement exists, and delivery has occurred or services have been rendered. For sales of devices, which are invoiced directly, additional
revenue recognition criteria include that the price is fixed and determinable and collectability is reasonably assured; for device sales
contracts with terms of more than one year, the Company recognizes any significant financing component as revenue over the contractual
period using the effective interest method, and the associated interest income is reflected accordingly on the statement of operations
and included in other income; for revenue that is earned based on customer usage of the proprietary software to render a patient’s
cardiac study, the Company recognizes revenue when the study ends based on a fixed billing rate. Costs associated with providing the
services are recorded as the service is provided regardless of whether or when revenue is recognized.
 
The
Company may also earn service-related revenue from contracts with other counterparties with which it consults. This contract work is
separate and distinct from services provided to clinical customers, but may be with a reseller or other counterparties that are working
to establish their operations in foreign jurisdictions or ancillary products or market segments in which the Company has expertise and
may eventually conduct business.
 
The
Company recognized the following forms of revenue for the fiscal years ended March 31, 2024 and 2023:
 


  
2024  
2023 

  
$  
$ 

Technology fees 
 11,249,113  
 8,802,032 

Device sales 
 814,232  
 837,035 

  
 12,063,345  
 9,639,057 

 

49
 

 
The
Company recognized the following forms of revenue for the three months ended March 31, 2024 and 2023:
 


  
2024  
2023 

  
$  
$ 

Technology fees 
 2,968,639  
 2,561,990 

Device sales 
 209,671  
 180,445 

  
 3,178,310  
 2,742,435 

 
Inventory
 
Inventory
is stated at the lower of cost and market value, cost being determined on a weighted average cost basis. Market value of our finished
goods inventory is determined based on its estimated net realizable value, which is generally the selling price less normally predictable
costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand
or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about
future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect
on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory.
 
Significant
accounting estimates and assumptions
 
The
preparation of the consolidated financial statements requires the use of estimates and assumptions to be made in applying the accounting
policies that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities.
The estimates and related assumptions are based on previous experiences and other factors considered reasonable under the circumstances,
the results of which form the basis for making the assumptions about the carrying values of assets and liabilities that are not readily
apparent from other sources.
 
The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period
in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
 
Significant
accounts that require estimates as the basis for determining the stated amounts include share-based compensation, impairment analysis
and fair value of warrants, structured notes, convertible debt and conversion liabilities.
 


●
Fair
    value of stock options

 
The
Company measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date
at which they are granted. Estimating fair value for share-based payments requires determining the most appropriate valuation model for
a grant of such instruments, which is dependent on the terms and conditions of the grant. The estimate also requires determining the
most appropriate inputs to the Black-Scholes option pricing model, including the expected life of the instrument, risk-free rate, volatility,
and dividend yield.
 


●
Fair
    value of warrants

 
 

 
In
    determining the fair value of the warrant issued for services and issue pursuant to financing transactions, the Company used the
    Black-Scholes option pricing model with the following assumptions: volatility rate, risk-free rate, and the remaining expected life
    of the warrants that are classified under equity.

 

50
 

 


●
Fair
    value of derivative liabilities

 
In
determining the fair values of the derivative liabilities from the conversion and redemption features, the Company used valuation models
with the following assumptions: dividend yields, volatility, risk-free rate and the remaining expected life. Changes in those assumptions
and inputs could in turn impact the fair value of the derivative liabilities and can have a material impact on the reported loss and
comprehensive loss for the applicable reporting period.
 


●
Functional
    currency

 
Determining
the appropriate functional currencies for entities in the Company requires analysis of various factors, including the currencies and
country-specific factors that mainly influence labor, materials, and other operating expenses.
 


●
Useful
    life of property and equipment

 
The
Company employs significant estimates to determine the estimated useful lives of property and equipment, considering industry trends
such as technological advancements, past experience, expected use and review of asset useful lives. The Company makes estimates when
determining depreciation methods, depreciation rates and asset useful lives, which requires considering industry trends and company-specific
factors. The Company reviews depreciation methods, useful lives and residual values annually or when circumstances change and adjusts
its depreciation methods and assumptions prospectively.
 


●
Provisions

 
Provisions
are recognized when the Company has a present obligation, legal or constructive, as a result of a previous event, if it is probable that
the Company will be required to settle the obligation and a reliable estimate can be made of the obligation. The amount recognized is
the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligations. Provisions are reviewed at the end of each reporting period and adjusted to
reflect the current best estimate of the expected future cash flows.
 


●
Contingencies

 
Contingencies
can be either possible assets or possible liabilities arising from past events, which, by their nature, will be resolved only when one
or more uncertain future events occur or fail to occur. The assessment of the existence and potential impact of contingencies inherently
involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.
 


●
Inventory
    obsolescence

 
Inventories
are stated at the lower of cost and market value. Market value of our inventory, which is all purchased finished goods, is determined
based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation.
The Company estimates net realizable value as the amount at which inventories are expected to be sold, taking into consideration fluctuations
in retail prices less estimated costs necessary to make the sale. Inventories are written down to net realizable value when the cost
of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining selling prices.
 


●
Income
    and other taxes

 
The
calculation of current and deferred income taxes requires the Company to make estimates and assumptions and to exercise judgment regarding
the carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation
of income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary
differences and possible audits of income tax filings by the tax authorities. In addition, when the Company incurs losses for income
tax purposes, it assesses the probability of taxable income being available in the future based on its budgeted forecasts. These forecasts
are adjusted to take into account certain non-taxable income and expenses and specific rules on the use of unused credits and tax losses.
 


51
 

 
When
the forecasts indicate that sufficient future taxable income will be available to deduct the temporary differences, a deferred tax asset
is recognized for all deductible temporary differences. Changes or differences in underlying estimates or assumptions may result in changes
to the current or deferred income tax balances on the consolidated statements of financial position, a charge or credit to income tax
expense included as part of net income (loss) and may result in cash payments or receipts. Judgment includes consideration of the Company’s
future cash requirements in its tax jurisdictions. All income, capital and commodity tax filings are subject to audits and reassessments.
Changes in interpretations or judgments may result in a change in the Company’s income, capital, or commodity tax provisions in
the future. The amount of such a change cannot be reasonably estimated.
 


●
Incremental
    borrowing rate for lease 

 
The
determination of the Company’s lease obligation and right-of-use asset depends on certain assumptions, which include the selection
of the discount rate. The discount rate is set by reference to the Company’s incremental borrowing rate. Significant assumptions
are required to be made when determining which borrowing rates to apply in this determination. Changes in the assumptions used may have
a significant effect on the Company’s consolidated financial statements.
 
Earnings
(Loss) Per Share
 
The
Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)
Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share
includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in
the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There
were no potentially dilutive shares outstanding as at March 31, 2024 and 2023.
 
Cash
 
Cash
includes cash on hand and balances with banks.
 
Foreign
Currency Translation
 
The
functional currency of the Company’s Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S. dollar.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange
rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using
the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate
on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included
in net income (loss) for the year. In translating the financial statements of the Company’s Canadian subsidiaries from their functional
currency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing
exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing
during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income
(loss) in stockholders’ deficiency. The Company has not, to the date of these consolidated financial statements, entered into derivative
instruments to offset the impact of foreign currency fluctuations.
 
Accounts
Receivable
 
Accounts
receivable consists of amounts due to the Company from medical facilities, which receive reimbursement from institutions and third-party
government and commercial payors and their related patients, as a result of the Company’s normal business activities. Accounts
receivable is reported on the balance sheets net of an estimated allowance for doubtful accounts. The Company establishes an allowance
for doubtful accounts for estimated uncollectible receivables based on historical experience, assessment of specific risk, review of
outstanding invoices, and various assumptions and estimates that are believed to be reasonable under the circumstances, and recognizes
the provision as a component of selling, general and administrative expenses. Uncollectible accounts are written off against the allowance
after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible.
 


52
 

 

Fair
Value of Financial Instruments
 
ASC
820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements
of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels
of inputs that may be used to measure fair value:
 
●
Level 1 – Valuation based on quoted market prices in active markets for identical assets or liabilities.
 
●
Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets.
 
●
Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s
best estimate of what market participants would use as fair value.
 
In
instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy,
the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is
significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
 
Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective
carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these
instruments or interest rates that are comparable to market rates. These financial instruments include cash, accounts receivable, deposits
and other receivables, convertible promissory notes, and accounts payable and accrued liabilities. The Company’s cash and derivative
liabilities, which are carried at fair values, are classified as a Level 1 and Level 3, respectively. The Company’s bank accounts
are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.
 
Property
and Equipment
 
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of
the assets. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. Depreciation
of property and equipment is provided using the straight-line method for all assets with estimated lives as follow:
 


 
Office
    equipment 
5
    years

 
Leasehold
    improvement 
5
    years

 
Impairment
for Long-Lived Assets
 
The
Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use
assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying
amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner,
except that fair values are reduced for the cost of disposal. Based on its review at March 31, 2024 and 2023, the Company believes there
was no impairment of its long-lived assets.
 

53
 

 
Leases
 
On
April 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace
existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees
to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases
will continue to be recognized in a manner like previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical
expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply
the new lease standard to the comparative periods presented in the year of adoption.
 
The
Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line
items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use
(“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent
the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value
of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception
are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated
statement of income. The Company determines the lease term by agreement with lessor. As our lease does not provide an implicit interest
rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining
the present value of future payments.
 
Income
Taxes
 
The
Company accounts for income taxes in accordance with ASC 740. The Company provides for Federal and Provincial income taxes payable, as
well as for those deferred because of the timing differences between reporting income and expenses for financial statement purposes versus
tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred
tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or expense in the
period of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is
more likely than not to be realized.
 
Research
and Development
 
Research
and development costs, which relate primarily to product and software development, are charged to operations as incurred. Under certain
research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement
of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments
made to third parties are expensed when the milestone is achieved. Milestone payments made to third parties after regulatory approval
is received are capitalized and amortized over the estimated useful life of the approved product.
 
Selling,
General and Administrative
 
Selling,
general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in
functions not directly associated with research and development activities. Other significant costs include sales and marketing costs,
investor relation and legal costs relating to corporate matters, professional fees for consultants assisting with business development
and financial matters, and office and administrative expenses.
 

54
 

 
Stock
Based Compensation
 
The
Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued
to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their
fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary,
in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized
over the requisite service period, which is generally the vesting period.
 
The
Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the
fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable,
using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management,
accounting, operations, corporate communication, financial and administrative consulting services.
 
Convertible
Notes Payable and Derivative Instruments
 
The
Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective
as of April 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated
balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting
period. Previously, the Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally
requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them
as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments,
are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion
options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC
470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company
records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair
value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the
note. Debt discounts under these arrangements are amortized over the term of the related debt.
 
Series
B Convertible Preferred Stock
 
The
Series B convertible preferred stock (“Series B Preferred Stock”) was accounted for as mezzanine equity and the embedded
conversion and redemption features was accounted for as derivative liabilities with change in fair value at each reporting period end
charged to consolidated statement of operation in accordance with ASC 480 and ASC 815.
 
Preferred
Share Redemption and Conversions
 
The
Company accounted for preferred stock redemptions and conversions in accordance to ASU-260-10-S99. For Series A preferred stock redemptions,
the difference between the fair value of consideration transferred to the holders of the preferred stock and the carrying amount of the
preferred stock is accounted as deemed dividend distribution and subtracted from net loss. For Series B preferred stock conversions,
no gain or loss is recognized upon Series B preferred stock conversion except for the fair value adjustment for the conversion and redemption
feature derivative liabilities on the conversion date.
 
Recently
Issued Accounting Pronouncements
 
Refer
to “Note 3— Summary of Significant Accounting Policies” to our consolidated financial statements included in “Part
II, Item 8 – Financial Statements and Supplementary Data” in this Annual Report for a discussion of recently issued accounting
pronouncements.
 

55
 

 
Off
Balance Sheet Arrangements
 
We
have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
 
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not
applicable to a smaller reporting company.
 
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
Our
financial statements and corresponding notes thereto called for by this item may be found beginning on page F-1 of this Annual Report
on Form 10-K.
 
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
 
None
 
ITEM
9A. CONTROLS AND PROCEDURES
 
Evaluation
of Disclosure Controls and Procedures
 
The
Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s
Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company’s management,
including its Chief Executive Officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure
based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure
controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control
objectives. In designing periods specified in the SEC’s rules and forms, and that such information is accumulated and evaluating
the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s certifying officers have
concluded that the Company’s disclosure controls and procedures are effective in reaching that level of assurance.
 
At
the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of
the Company’s management, including the Company’s Chief Executive Officer and principal financial officer, of the effectiveness
of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer
and principal financial officer concluded that our disclosure controls and procedures were effective to ensure that the material information
required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including
our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities
and Exchange Commission rules and forms relating to the Company, based on the assessment and control of disclosure decisions currently
performed by a small team. The Company plans to expand its management team and build a fulsome internal control framework required by
a more complex entity.
 

56
 

 
Management’s
Report on Internal Control over Financial Reporting
 
Management
of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section
13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or
under the supervision of, the Company’s principal financial officer to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the Company’s financial statements for external reporting purposes in conformity with
U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the Company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management
and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on the financial statements.
 
As
of March 31, 2024, management conducted an assessment of the effectiveness of the Company’s internal control over financial
reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission (2013). Based on the criteria established by COSO management concluded that the
Company’s internal control over financial reporting was effective as of March 31, 2024.
 
This
Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal
control over financial reporting as smaller reporting companies are not required to include such report. Management’s report is not subject to attestation by the Company’s
independent registered public accounting firm.
 
Limitations
on the Effectiveness of Controls
 
Management
has confidence in its internal controls and procedures. The Company’s management believes that a control system, no matter how
well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal
control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of
fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation
in all internal control systems, no evaluation of controls can provide absolute assurance that all control issuers and instances of fraud,
if any, within the Company have been detected.
 
Changes
in Internal Controls
 
There
were no changes in the Company’s internal controls over financial reporting that occurred during the three months ended March 31,
2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
 
Internal
control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to
be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls
are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
 
ITEM
9B. OTHER INFORMATION
 
During the quarter ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule
10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation
S-K.
 
ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
 
Not
applicable.
 

57
 

 
PART
III
 
ITEM
10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
Our
executive officers and directors are as follows:
 


Name
 
Age
 
Position

Waqaas
    Al-Siddiq
 
39
 
President,
    Chief Executive Officer and
Chairman
    of the Board of Directors

David
    A. Rosa
 
59
 
Director

Ron
    McClurg
 
65
 
Director

Chester
    White
 
59
 
Director

John
    Ayanoglou
 
58
 
Chief
    Financial Officer

 
Waqaas
Al-Siddiq: President, Chief Executive Officer and Chairman of the Board of Directors. Waqaas Al-Siddiq is the founder of iMedical
and has been its Chairman and Chief Executive Officer since inception in July 2014. Prior to that, from July 2010 through July 2014,
he was the Chief Technology Officer of Sensor Mobility Inc., a Canadian private company engaged in research and development activities
within the remote monitoring segment of preventative care and that was acquired by iMedical in August 2014. Mr. Al-Siddiq also provided
consulting services with respect to technology strategy during this time. Mr. Al-Siddiq serves as a member of the Board of Directors
as he is the founder of iMedical and his current executive position with the Company. We also believe that Mr. Al-Siddiq is qualified
due to his experience as an entrepreneur and raising capital.
 
David
Rosa: Director. Mr. Rosa has been a director of the Company since May 3, 2016. In addition, he is a director and Chairman of
the board for Neuro Event Labs, a privately held company based in Finland that is developing a diagnostic epilepsy video technology.
He currently also serves as the CEO and President of NeuroOne, a medical technology company, having served in various capacities since
October 2016. He was the CEO and President of Sunshine Heart, a publicly-held early-stage medical device company, from October 2009 through
November 2015. From 2008 to November 2009, Mr. Rosa served as CEO of Milksmart, a company that specializes in medical devices for animals.
From 2004 to 2008, Mr. Rosa served as the Vice President of Global Marketing for Cardiac Surgery and Cardiology at St. Jude Medical.
He is a member of the Board of Directors of QXMedical, a Montreal-based medical device company, and other privately-held companies. We
believe Mr. Rosa is qualified to serve as a director due to his senior leadership experience in the medical device industry, and his
expertise in market development, clinical affairs, commercialization and public and private financing. as well as his strong technical,
strategic and global operating experience.
 
Ronald
McClurg: Director. Mr. McClurg is a senior financial executive with over 30 years of experience leading the finance, administrative
and IT functions in private and public companies. He has served as Chief Financial Officer of NeuroOne Medical Technologies Corp. (Nasdaq:NMTC)
since 2021. . From 2003 to 2019, Mr. McClurg was the Vice President, Finance & Administration and Chief Financial Officer for Incisive
Surgical, Inc. Prior to 2002, Mr. McClurg served as Chief Financial Officer of several other publicly-held companies. He serves on the
Board of Governors and as Audit Committee Chair of Biomagnetic Sciences, LLC and as Audit Chair of Healthcare Triangle, Inc. (Nasdaq:
HTCI). We believe that Mr. McClurg is qualified to serve as a director due to his extensive background in corporate finance.
 
Chester
White: Director. Mr. White has 35 years investment management and financial advisory experience investing in and advising emerging
growth technology companies in the technology segments including AI, Robotics, Genetics, Mobility, FinTech, MedTech, GreenTech, Internet/Cloud
and EnablingTech. He is recognized as one of the top Wallstreet analysts covering the Internet and Cloud segment speaking at industry
forums and public venues such as CNBC and CNN. From 1986 to 1996 he served as a VP of Investment at Paine Webber (acquired by UBS) and
Dean Witter (acquire by Morgan Stanley). He began his institutional investment career as a sell side analyst in 1996 at LH Friend and
SVP of emerging technology equity research at Wells Fargo. He went on to become an MD of Technology Investment Banking at MCF & Co.
and Managing Director of Griffin Partners LLC. In 2014 he founded Helios Alpha Fund, LP, an emerging growth technology hedge fund focused
on sustainability and innovation. Chet has an MBA from University of Southern California; B.S. in Finance, University of Maryland, Stanford
/ Coursera Machine Learning, Member of SF CFA Society.
 


58
 

 

John
Ayanoglou: Chief Financial Officer. Mr. Ayanoglou has served as our Chief Financial Officer since 2017 and has served as Chief
Financial Officer of four other companies during his career, three of which were publicly-listed. Mr. Ayanoglou currently serves as a
director of DX Mortgage Investment Corporation (2019), Green Sky Labs (2020) and Omega Wealthguard (2020). From 2011 to 2017, Mr. Ayanoglou
served as Executive Vice President of Build Capital. Prior to this, he served as Chief Financial Officer and Senior Vice President of
Equitable Group Inc. (TSX: ETC) and its wholly owned subsidiary, Equitable Bank, Canada’s 9th largest bank during the
global banking crisis, from 2008 through 2011. Mr. Ayanoglou also served as CFO, Vice President and Corporate Secretary of Xceed Mortgage
Corporation (TSX: XMC), from 2004 to 2008. He launched his career in financial services while providing advisory services to clients
at PricewaterhousCoopers LLP and working for Scotiabank and TD Bank. He is a chartered accountant and a member of CPA Canada. He received
his ICD.D designation from the Institute of Corporate Directors at the Rotman School of Business.
 
There
are no family relationships among any of our current officers and directors.
 
Section
16(a) Beneficial Ownership Reporting Compliance
 
Section
16(a) of the Securities Exchange Act requires that our directors and executive officers and persons who beneficially own more than 10%
of our common stock (referred to herein as the “reporting persons”) file with the SEC various reports as to their ownership
of and activities relating to our common stock. Such reporting persons are required by the SEC regulations to furnish us with copies
of all Section 16(a) reports they file. Based solely on our review of copies of the reports filed with the SEC and the written representations
of our directors and executive officers, we believe that all reporting requirements for fiscal year 2024 were complied with by each person
who at any time during the 2024 fiscal year was a director or an executive officer or held more than 10% of our common stock.
 
Board
Diversity
 
The
table below provides certain highlights of the diversity characteristics of our directors:
 


Board Diversity Matrix (As of June 25, 2024)

Total Number of Directors – 4 
   
   
   
  

  
Female  
Male  
Non-Binary  
Did Not Disclose Gender 

Part I: Gender Identity 
    
    
    
   

Directors 
   
 4  
   
  

  
    
    
    
   

Part II: Demographic Background 
    
    
    
   

African American or Black 
    
   
    
   

Alaskan Native or Native American 
    
    
    
   

Asian 
    
 1  
    
   

Hispanic or Latinx 
    
    
    
   

Native Hawaiian or Pacific Islander 
    
    
    
   

White 
    
 3  
    
   

Two or More Races or Ethnicities 
    
    
    
   

LGBTQ+ 
    
    
    
   

Did Not Disclose Demographic Background 
    
    
    
   

 

59
 

 

Corporate
Governance
 
The
business and affairs of the Company are managed under the direction of our Board of Directors, which is comprised of Mr. Al-Siddiq, Mr.
Rosa, Mr. McClurg and Mr. White.
 
Term
of Office
 
Directors
are appointed to hold office until the next annual general meeting of stockholders, and until their successors have been duly elected
and qualified, or until their earlier resignation or removal from office in accordance with our bylaws. Our officers are appointed by
our Board and hold office until removed by our Board or their resignation.
 
Clawback
Policy
 
The
Board has adopted a clawback policy which allows us to recover performance-based compensation, whether cash or equity, from a current
or former executive officer in the event of an Accounting Restatement. The clawback policy defines an Accounting Restatement as an accounting
restatement of our financial statements due to our material noncompliance with any financial reporting requirement under the securities
laws. Under such policy, we may recoup incentive-based compensation previously received by an executive officer that exceeds the amount
of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts in the Accounting
Restatement.
 
The
Board has the sole discretion to determine the form and timing of the recovery, which may include repayment, forfeiture and/or an adjustment
to future performance-based compensation payouts or awards. The remedies under the clawback policy are in addition to, and not in lieu
of, any legal and equitable claims available to the Company.
 
Insider
Trading Policies
 
We
have adopted an insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, senior management,
and employees. A copy of the Insider Trading Policy has been filed herewith, as exhibit 19.
 
Board
Committees
 
Our
Board of Directors has established three standing committees: an audit committee, a nominating and corporate governance committee, and
a compensation committee, which are described below. Members of these committees are elected annually at the regular board meeting held
in conjunction with the annual stockholders’ meeting.
 
Audit
Committee
 
The
Audit Committee, among other things, is responsible for:
 


 
●
selecting a qualified firm
    to serve as the independent registered public accounting firm to audit our financial statements;

 
 
 

 
●
helping to ensure the independence
    and performance of the independent registered public accounting firm;

 
 
 

 
●
discussing the scope and
    results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants,
    our interim and year-end operating results;

 
 
 

 
●
developing procedures for
    employees to submit concerns anonymously about questionable accounting or audit matters;

 
 
 

 
●
reviewing our policies
    on risk assessment and risk management;

 


60
 

 


 
●
reviewing related party
    transactions; 

 
 
 

 
●
obtaining and reviewing
    a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures,
    any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and 

 
 
 

 
●
approving (or, as permitted,
    pre-approving) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the
    independent registered public accounting firm. 

 
The
Board has affirmatively determined that each member of the Audit Committee meets the additional independence criteria applicable to audit
committee members under SEC rules and the NASDAQ Stock Market. The Board of Directors has adopted a written charter setting forth the
authority and responsibilities of the Audit Committee. The Board has affirmatively determined that each member of the Audit Committee
is financially literate, and that Ronald McClurg meets the qualifications of an Audit Committee financial expert. The Audit Committee
consists of Ronald McClurg, David A. Rosa and Chester White. Ronald McClurg is the chairman of the Audit Committee. Norman Betts was
the chairman of the Audit Committee until his resignation from the Board in August 2022.
 
Compensation
Committee
 
The
functions of the compensation committee include:
 


 
●
reviewing and approving,
    or recommending that our Board approve, the compensation of our executive officers;

 
 
 

 
●
reviewing and recommending
    that our Board approve the compensation of our directors;

 
 
 

 
●
reviewing and approving,
    or recommending that our Board approve, the terms of compensatory arrangements with our executive officers;

 
 
 

 
●
administering our stock
    and equity incentive plans;

 
 
 

 
●
selecting independent compensation
    consultants and assessing conflict of interest compensation advisers;

 
 
 

 
●
reviewing and approving,
    or recommending that our Board approve, incentive compensation and equity plans; and;

 
 
 

 
●
reviewing and establishing
    general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.

 
The
Board has adopted a written charter setting forth the authority and responsibilities of the Compensation Committee. The Compensation
Committee consists of David Rosa and Chester White. Dave Rosa is the chairman of the Compensation Committee.
 
Nominating
and Corporate Governance Committee
 
The
Nominating and Corporate Governance Committee, among other things, is responsible for:
 


 
●
identifying and screening
    individuals qualified to become members of the Board, consistent with the criteria approved by the Board;

 
 
 

 
●
making recommendations
    to the Board regarding the selection and approval of the nominees for director to be submitted to a stockholder vote at the annual
    meeting of stockholders;

 
 
 

 
●
developing and recommending
    to the Board a set of corporate governance guidelines applicable to the Company, to review these principles at least once a year
    and to recommend any changes to the Board;

 
 
 

 
●
overseeing the Company’s
    corporate governance practices and procedures, including identifying best practices and reviewing and recommending to the Board for
    approval any changes to the documents, policies and procedures in the Company’s corporate governance framework, including its
    certificate of incorporation and by-laws; and

 


61
 

 


 
●
developing
    subject to approval by the Board, a process for an annual evaluation of the Board and its committees and to oversee the conduct of
    this annual evaluation.

 
The
Board of Directors has adopted a written charter setting forth the authority and responsibilities of the Nominating and Corporate Governance
Committee. The Nominating and Corporate Governance Committee consists of David Rosa and Chester White, with David Rosa serving as chairman.
 
Code
of Business Conduct and Ethics Policy
 
We
adopted a Code of Business Conduct and Ethics as of April 12, 2016, that applies to, among other persons, our principal executive officers,
principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Business
Conduct and Ethics is available on our website www.biotricity.com.
 
Director
Independence
 
We
use the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2)
provides that an “independent director” is a person other than an officer or employee of the company or any other individual
having a relationship, which, in the opinion of the Company’s Board, would interfere with the exercise of independent judgment
in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent
if:
 


 
● 
The director is, or at
    any time during the past three years was, an employee of the company;

 
 
 

 
● 
The director or a family
    member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months
    within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation
    for board or board committee service);

 
 
 

 
● 
A family member of the
    director is, or at any time during the past three years was, an executive officer of the company;

 
 
 

 
● 
The director or a family
    member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made,
    or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s
    consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);

 
 
 

 
● 
The director or a family
    member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the
    executive officers of the company served on the compensation committee of such other entity; or

 
 
 

 
● 
The director or a family
    member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was
    a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

 
Under
such definitions, Mr. McClurg. Mr. White and Mr. Rosa are independent directors.
 


62
 

 
ITEM
11. EXECUTIVE COMPENSATION
 
The
following table set forth certain information as to the compensation paid to the executive officers of the Company and iMedical, its
predecessor, for the fiscal years ended March 31, 2024 and March 31, 2023.
 



Name and Principal Position 
Fiscal Year  
Salary  
Bonus  
Stock Awards  
Option/Warrant
Awards(1)  
Non-Equity
Incentive Plan Compensation  
All
Other Compensation  
Total  

Waqaas Al-Siddiq 
 2024  
$480,000  
$240,000  
   
$522,153  
   
$12,000  
$1,254,153 

Chief Executive Officer 
 2023  
$480,000  
$240,000  
   
$428,757  
   
$12,000  
$1,160,757 

  
    
    
    
    
    
    
    
   

John Ayanoglou 
 2024  
$300,000  
$250,000  
    
   
    
$12,000  
$562,000 

Chief Financial Officer 
 2023  
$293,750  
$-  
    
$232,537  
    
$12,000  
$538,287 

 


 
(1)
For
    assumptions made in such valuation, see Note 7 to our audited financial statements included in this Annual report on Form 10-K, commencing
    on page F-1. Amounts shown as option awards for Mr. Ayanoglou were granted as warrants, while he was not a member of the Company’s
    options program. On June 21, 2024, Mr. Ayanoglou was awarded a grant of 21,585 warrants that vested on grant, and have a 10-year term,
and an exercise price of $1.48.

 
Outstanding
Equity Awards at Fiscal Year-End
 
The
following table provides information about the number of outstanding equity awards held by our named executive officers at March 31,
2024:
 



  
  
  
   
Option Awards(1)  
 

Name 
Award Type 
Grant Date 
Number of securities underlying unexercised options or warrants exercisable  
Number of securities underlying unexercised options or warrants exercisable  
Option or Warrant exercise price ($)  
Option or Warrant expiration date

Waqaas Al-Siddiq 
Option 
7-12-16 
 416,664(3) 
 -  
$13.20  
7-12-26

Waqaas Al-Siddiq 
Option 
4-7-20 
 175,008(4) 
 58,336  
$6.30  
4-7-30

Waqaas Al-Siddiq 
Option 
3-12-23 
 29,167(5) 
 29,167  
$7.50  
3-12-33

Waqaas Al-Siddiq 
Option 
3-12-23 
 29,167(5) 
 29,167  
$10.50  
3-12-33

Waqaas Al-Siddiq 
Option 
3-12-23 
 41,667(6) 
 125,028  
$4.86  
3-12-33

John Ayanoglou 
Warrant 
10-26-17 
 8,333(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
3-31-18 
 8,333(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
6-30-18 
 8,333(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
9-30-18 
 8,333(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
12-31-18 
 8,333(2) 
    
$2.88  
12-30-28

John Ayanoglou 
Warrant 
3-31-19 
 8,333(3) 
    
$5.46  
3-30-29

John Ayanoglou 
Warrant 
6-30-19 
 8,333(3) 
    
$3.96  
6-29-29

John Ayanoglou 
Warrant 
9-30-19 
 8,333(3) 
    
$3.48  
9-29-29

John Ayanoglou 
Warrant 
12-31-19 
 8,333(2) 
    
$3.78  
12-30-29

John Ayanoglou 
Warrant 
3-31-20 
 8,333(2) 
    
$5.84  
3-31-30

John Ayanoglou 
Warrant 
6-30-20 
 8,333(2) 
    
$8.20  
6-30-30

John Ayanoglou 
Warrant 
9-30-20 
 8,333(2) 
    
$6.66  
9-30-30

John Ayanoglou 
Warrant 
1-24-20 
 8,333(2) 
    
$4.50  
1-23-30

John Ayanoglou 
Warrant 
12-31-20 
 8,333(2) 
    
$4.44  
12-31-30

John Ayanoglou 
Warrant 
3-31-21 
 8,333(2) 
    
$14.40  
3-31-31

John Ayanoglou 
Warrant 
4-30-17 
 1,250(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
5-31-17 
 1,250(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
6-30-17 
 1,250(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
7-31-17 
 1,250(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
8-31-17 
 1,250(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
9-30-17 
 2,917(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
9-30-17 
 3,333(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
12-5-17 
 2,301(2) 
    
$4.38  
12-31-30

John Ayanoglou 
Warrant 
6-30-21 
 8,333(2) 
    
$14.40  
6-30-31

John Ayanoglou 
Warrant 
9-30-21 
 8,333(2) 
    
$14.40  
9-30-31

John Ayanoglou 
Warrant 
12-31-21 
 8,333(2) 
    
$14.40  
12-31-31

John Ayanoglou 
Warrant 
3-31-22 
 6,266(2) 
    
$13.62  
3-31-32

John Ayanoglou 
Warrant 
6-30-22 
 8,971(2) 
    
$10.62  
6-30-32

John Ayanoglou 
Warrant 
9-30-22 
 19,714(2) 
    
$4.80  
9-30-32

John Ayanoglou 
Warrant 
12-31-22 
 36,464(2) 
    
$2.69  
12-30-32

 


(1)
Unless otherwise indicated,
    vesting of all options and warrants is subject to continued service on the applicable vesting date.

(2)
The shares subject to the
    options/warrants, as applicable, vested in full upon the date of grant.

(3)
The shares subject to the
    stock option vest monthly over 36 months.

(4)
The shares subject to the
    stock option vest quarterly over 16 quarters.

(5)
The shares subject to the
    stock options vest 50% on the date of grant and 50% on the one-year anniversary of the date of grant.

(6)
The shares subject to the
    stock option vest 41,667 on the date of grant and the balance monthly pro rata for 36 months.

 

63
 

 
Employment
Agreements
 
Waqaas
Al-Siddiq
 
We
entered into an employment agreement with Mr. Al-Siddiq dated as of April 10, 2020. Pursuant to the Employment Agreement, Mr. Al-Siddiq
(“Executive”) will continue to serve as the Corporation’s Chief Executive Officer. The term of the Employment Agreement
is for 12 months unless it is earlier terminated pursuant to its terms and it shall be automatically renewed for successive one year
periods until the Executive or the Company delivers to the other party a written notice of their intent not to renew the employment term
at least 30 days prior to the expiration of the then effective employment term. During the term of the Employment Agreement, Executive
salary was initially $390,000, subject to any increase approved by the Company’s board. For the years ended March 31, 2023 and
2024, Mr. Al-Sidddiq’s salary was $480,000 per annum. Under the Employment Agreement, the Executive is eligible to earn a cash
and/or equity bonus of up to 50% of his then annual salary. In the event that the Executive is terminated without just cause or terminates
for good reason (as these terms are defined in the Employment Agreement), the Executive will be entitled to a severance payment equal
to 12 months of salary paid on a monthly basis and accrued but unused vacation. Mr. Al-Siddiq is also compensated through period, approved
option grants.
 
This
summary is qualified in all respects by the actual terms of the employment agreement, which was filed as Exhibit 10.1 to our current
report on Form 8-K on April 13, 2020
 
John
Ayanoglou
 
In connection with Mr. Ayanoglou’s official appointment as Chief Financial Officer effective as of October 27, 2017, the Company
agreed to pay Mr. Ayanoglou an initial base salary of $200,000, subject to approved increases and an approved cash or equity bonus. Mr.
Ayanoglou’s base salary for calendar 2021, 2022, 2023 and 2024 was set at $300,000. In addition, the Company agreed to grant Mr.
Ayanoglou warrants to purchase 33,333 shares (200,000 shares on a pre-reverse-split basis) of the Company’s common stock, during
each year of his tenure, granted in equal quarterly installments starting with the first fiscal quarter of employment. The warrants vest
monthly on a pro-rata basis over a period of 12 months, with the same 10-year term and the same rights and protections as executive options
awarded under the Company’s 2016 Equity Incentive Plan.
 
Director
Compensation
 
The
following table sets forth a summary of the compensation for our non-employee directors during the fiscal years ended March 31, 2024
and March 31, 2023.
 



Name 
Year  
Fees
    Earned or Paid in Cash  
Stock
    Awards  
Option
    Awards  
Non-Equity
    Incentive Plan Compensation  
Nonqualified
    Deferred Compensation Earnings  
All
    Other Compensation  
Total 

Ronald
    McClurg (1) 
 2024  
$16,000  
 -  
 16,617  
          -  
      -  
         -  
$32,617 

  
 2023  
$14,667  
 -  
 -  
 -  
 -  
 -  
$14,667 

  
    
    
    
    
    
    
    
   

David
    A. Rosa (2) 
 2024  
$60,000  
    
    
 -  
   
 -  
$60,000 

  
 2023  
$58,000  
    
    
 -  
   
 -  
$58,000 

  
    
    
    
    
    
    
    
   

Chester
    White (3) 
 2024  
$   
 -  
 -  
 -  
 -  
 -  
$- 

  
 2023  
$   
 -  
 -  
 -  
 -  
 -  
$- 

  
    
    
    
    
    
    
    
   

Steve Salmon
    (4) 
 2024  
$   
 -  
 -  
 -  
 -  
 -  
$- 

  
 2023  
$2,000  
 -  
 -  
 -  
 -  
 -  
$2,000 

  
    
    
    
    
    
    
    
   

Dr. Norman
    M. Betts (5) 
 2024  
$  
                                          
    
 -  
 -  
 -  
 -  
$- 

  
 2023  
$2,000  
    
 -  
 -  
 -  
 -  
$2,000 

  
    
    
    
    
    
    
    
   

Patricia
    Kennedy (6) 
 2024  
$-  
 -  
 -  
 -  
 -  
 -  
$- 

  
 2023  
$14,000  
 -  
 -  
 -  
 -  
 -  
$14,000 

 


(1)
Mr.
    McClurg was appointed to the board on May 2, 2022. On June 21, 2024, Mr. McClurg was awarded a grant of 21,585 options, that vested on grant, and have a 10-year term,
and an exercise price of $1.48.

(2)
On June 21, 2024, Mr. Rosa was awarded a grant of 127,778 options, that vested on grant, and have a 10-year term,
and an exercise price of $1.48.

(3)
Mr.
    White was appointed to the board on August 11, 2022. On June 21, 2024, Mr. White was awarded a grant of 21,585 options, that vested on grant, and have a 10-year term,
and an exercise price of $1.48.

(4)
Mr.
    Salmon resigned from the board on May 2, 2022.

(5)
Mr.
    Betts resigned from the board on August 4, 2022.

(6)
Ms.
    Kennedy resigned from the board on August 4, 2022.

 


64
 

 
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
The
following table shows the beneficial ownership of our common stock as of June 25, 2024 held by (i) each affiliated person known to
us to be the beneficial owner of more than five percent of our common stock; (ii) each director; (iii) each executive officer; and
(iv) all directors, director nominees and executive officers as a group.
 
Beneficial
ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect
to the securities held. Shares of common stock subject to options and warrants currently exercisable or which may become exercisable
within 60 days of June 25, 2024 are deemed outstanding and beneficially owned by the person
holding such options or warrants for purposes of computing the number of shares and percentage beneficially owned by such person, but
are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the
footnotes to this table, the persons or entities named have sole voting and investment power with respect to all shares of our common
stock shown as beneficially owned by them.
 
The
following table assumes 21,615,068 shares are outstanding as of June 25, 2024, consisting
of 21,484,396 shares of common stock and 160,672 Exchangeable Share common stock equivalents. The percentages below assume the exchange
by all of the holders of Exchangeable Shares of iMedical for an equal number of shares of our common stock in accordance with the terms
of the Exchangeable Shares. Unless otherwise indicated, the address of each beneficial holder of our common stock is our corporate address.
 


Name of Beneficial Owner 
 Shares of Common Stock Beneficially Owned  
  % of Shares of Common Stock Beneficially Owned   

Waqaas Al-Siddiq (1) 
 1,642,355  
 7.21%

John Ayanoglou (2) 
 273,161  
 1.20%

David A. Rosa (2) 
 298,188  
 1.31%

Chester White (2) 
 149,197  
    *  

Ronald McClurg (2) 
 35,305  
    *  

Mohamed Abdi 
 1,790,434  
 7.86%

Mohammad Siddiqui 
 1.898.159  
 8.33%

Rizwana Siddiqui 
 1,790,434  
 7.86%

Sohaira Siddiqui 
 1.916.910  
 8.41%

Rizwan Rahman 
 1,790,434  
 7.86%

  
    
   

All directors and executive officers as a group 
 2,398,206  
 10.52%



 
*
Less than 1%
 
(1)
Includes an option to purchase an aggregate of 859,965 of the Company’s shares.
 
(2)
Includes options and warrants that were granted during 2017 to 2024, that are exercisable within 60 days of June 25,
2024.
 


65
 

 

ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
None.
 
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
The
following table presents the fees for professional audit services for the fiscal years ended March 31, 2024 and March 31, 2023.
 


Fee Category 
2024  
2023 

Audit Fees (1) 
$155,377  
$145,733 

Audit-Related Fees (2) 
    
   

Tax Fees 
    
   

All Other Fees 
    
   

Total Fees 
$155,377  
$145,733 

 


(1)
Audit
    fees consist of audit and review services, consents and review of documents filed with the SEC.

 
 

(2)
Audit-related
    fees consists of fees for professional services rendered in connection with the Company’s registration statements and offerings.

 
Pre-Approval
Policies and Procedures
 
In
its capacity, the Board pre-approves all audit (including audit-related) and permitted non-audit services to be performed by the independent
auditors. The Board will annually approve the scope and fee estimates for the year-end audit to be performed by the Company’s independent
auditors for the fiscal year. With respect to other permitted services, the Board pre-approves specific engagements, projects and categories
of services on a fiscal year basis, subject to individual project and annual maximums. To date, the Company has not engaged its auditors
to perform any non-audit related services.
 

66
 

 
PART
IV
 
ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 




Exhibit
 
Description

3.1
 
Amended and Restated Articles of Incorporation (filed as Exhibit 3(i) to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

3.2
 
Amended and Restated By-Laws (filed as Exhibit 3(ii) to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

4.1
 
Certificate of Designation of Preferences, Rights and Limitations of Special Voting Preferred Stock of Biotricity Inc. (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

4.2
 
Exchangeable Share provisions with respect to the special rights and restrictions attached to Exchangeable Shares (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

4.3
 
Form of Secured Convertible Debenture due September 21, 2017 (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

4.4
 
Form of Warrant (filed as Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

4.5
 
Form of Convertible Promissory Note (filed as Exhibit 4.5 to the Registrant’s Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference).

4.6
 
Form of Warrant (filed as Exhibit 4.6 to the Registrant’s Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference).

4.7
 
Form of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference).

4.8
 
Form of Placement Agent Warrant (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference).

4.9
 
Form of Promissory Note (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference).

4.10
 
Form of Promissory Note (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 12, 2019 and incorporated herein by reference).

4.11
 
Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 20, 2019 and incorporated herein by reference).

4.12
 
Promissory Note between Biotricity Ic. and Cross River Bank (filed as exhibit 4.12 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020 filed with the SEC on July 15, 2020 and incorporated herein by reference).

4.13
 
Description of Registrant’s Securities

10.1
 
Exchange Agreement, dated February 2, 2016, among Biotricity Inc., Biotricity Callco Inc., Biotricity Exchangeco Inc., iMedical Innovation Inc. and the Shareholders of iMedical Innovations Inc. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

10.2
 
Assignment and Assumption Agreement, dated as of February 2, 2016, by and between Biotricity Inc. and W270 SA (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

10.3
 
Voting and Exchange Trust Agreement, as of February 2, 2016, among Biotricity Inc., Biotricity Callco Inc., Biotricity Exchangeco Inc. and Computershare filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

10.4
 
Support Agreement, made as of February 2, 2016, among Biotricity Inc., Biotricity Callco Inc. and Biotricity Exchangeco Inc. (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

10.5*
 
2016 Equity Incentive Plan (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).

10.6
 
Exclusivity & Royalty Agreement, dated as of September 15, 2014, by and between iMedical Innovation Inc. and CardioComm Solutions, Inc. (Filed as Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 and incorporated herein by reference).


 

67
 

 



10.7*
 
Employment Agreement dated April 12, 2016 with Waqaas Al-Siddiq (filed as Exhibit 10.7 to the Registrant’s Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference).

10.8
 
Form of Subscription Agreement for convertible promissory notes and warrants (filed as Exhibit 10.8 to the Registrant’s Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference).

10.9
 
Investment Banking Agreement, as amended (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference).

10.10
 
Form of Subscription Agreement (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 9, 2017 and incorporated herein by reference).

10.11+
 
Software Development and Services Agreement, dated as of September 15, 2014, by and between iMedical Innovations Inc. and CardioComm Solutions, Inc. (filed as Exhibit 10.11 to the Registrant’s Transition Report on Form 10-KT filed with the SEC on June 29, 2017 and incorporated herein by reference).

10.12
 
Form of Securities Purchase Agreement (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 26, 2017 and incorporated herein by reference).

10.14
 
Form of Promissory Note (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 15, 2019 and incorporated herein by reference).

10.15
 
Form of Purchase Agreement (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 15, 2019 and incorporated herein by reference).

10.16
 
Form of Subscription Agreement (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 12, 2019 and incorporated herein by reference).

10.17
 
Form of Securities Purchase Agreement (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 20, 2019 and incorporated herein by reference).

10.18
 
Form of Exchange Agreement (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 13, 2019 and incorporated herein by reference).

10.19
 
Employment Agreement between the Company and Waqaas Al-Siddiq filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 13, 2020 and incorporated herein by reference).

10.20
 
Form of Subscription Agreement (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference).

10.21
 
Form of Convertible Promissory Note (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference).

10.22
 
Form of Warrant filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference).

10.23
 
Form of Registration Rights Agreement filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 6, 2020 and incorporated herein by reference).

10.24
 
Form of Subscription Agreement filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 22, 2021 and incorporated herein by reference).

10.25
 
Form of Convertible Promissory Note filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 22, 2021 and incorporated herein by reference).

10.26
 
Form of Registration Rights Agreement filed as Exhibit 10. 4 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 22, 2021 and incorporated herein by reference).

10.27
 
Credit Agreement (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference).

10.28
 
Common Stock Purchase Agreement (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference).

10.29
 
Collateral Agreement (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference).

10.30
 
IP Security Agreement (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 28, 2021 and incorporated herein by reference).

10.31
 
At The Market Offering Agreement, by and between the Company and H.C. Wainwright & CO, LLC, dated March 22, 2022 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 22, 2022 and incorporated herein by reference).

10.32
 
Credit Agreement, by and between the Company and SWK Funding LLC (filed as Exhibit 10.1 to the current report under Form 8-K filled with SEC on December 28, 2021)

14.1
 
Code of Business Conduct and Ethics (filed as Exhibit 14.1 to the Registrant’s Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference).

19
 
Insider Trading Policy

21.1
 
List of Subsidiaries (filed as Exhibit 21.1 to the Registrant’s Transition Report on Form 10-KT filed with the SEC on April 13, 2016 and incorporated herein by reference).

23.1
 
Consent of SRCO Professional Corporation

31.1
 
Section 302 Certification of Principal Executive Officer

31.2
 
Section 302 Certification of Principal Financial and Accounting Officer

32.1
 
Section 906 Certification of Principal Executive Officer

32.2
 
Section 906 Certification of Principal Financial and Accounting Officer

97
 
Clawback policy

101
 
Inline XBRL Instance Document (the instance document does not appear in
the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

104
 
Cover
    Page Interactive Data File (embedded within the Inline XBRL document)

 



*
Indicates
    management contract or compensatory plan or arrangement.

+
Portions
    of this document have been omitted and submitted separately with the Securities and Exchange Commission pursuant to a request for
    “Confidential Treatment”.

 
ITEM
16. FORM 10-K SUMMARY
 
None.
 

68
 

 
SIGNATURES
 
Pursuant
to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized on the day of June 25, 2024.
 


 
BIOTRICITY
    INC.

 
 
 

 
By:
/s/
    Waqaas Al-Siddiq

 
 
Waqaas
    Al-Siddiq

 
 
Chief
    Executive Officer and President

 
In
accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
 


Signature
 
Title
 
Date

 
 
 
 
 

/s/
    Waqaas Al-Siddiq
 
Chairman,
    President and Chief Executive Officer (principal executive officer)
 
June 25, 2024

Waqaas
    Al-Siddiq
 
 
 
 

 
 
 
 
 

/s/
    John Ayanoglou
 
Chief
    Financial Officer (principal financial and accounting officer)
 
June 25, 2024

John
    Ayanoglou
 
 
 
 

 
 
 
 
 

/s/
    David A. Rosa
 
Director
 
June 25, 2024

David
    A. Rosa
 
 
 
 

 
 
 
 
 

/s/
    Chester White
 
Director
 
June 25, 2024

Chester
    White
 
 
 
 

 
 
 
 
 

/s/
    Ronald McClurg 
 
Director
 
June 25, 2024

Ronald
    McClurg 
 
 
 
 

 

69
 

 
Consolidated
Financial Statements
Biotricity
Inc.
For
the years ended March 31, 2024 and 2023
 
Table
of Contents
 


Report of Independent Registered Public Accounting Firm (PCAOB ID: 5828) 
F-1

Consolidated
    Financial Statements for the years ended March 31, 2024 and 2023:
 

Consolidated Balance Sheets
F-3

Consolidated Statements of Operations and Comprehensive Loss
F-4

Consolidated
    Statements of Mezzanine Equity and Stockholders’ Deficiency
F-5

Consolidated Statements of Cash Flows
F-6

Notes to Consolidated Financial Statements
F-7
    - F-39

 

70
 


 

 
REPORT 
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To
the Board of Directors and Stockholders of Biotricity Inc.:
 
Opinion
on the Financial Statements
 

We have audited the accompanying consolidated balance
sheets of Biotricity Inc. and its subsidiary (the Company) as of March 31, 2024 and 2023 and the related consolidated statements of operations
and comprehensive loss, mezzanine equity and stockholders’ deficiency, and cash flows for each of the years in the two-year period
ended March 31, 2024 and related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as at March 31, 2024 and 2023 and the results
of its operations and its cash flows for each of the years in the two-year period ended March 31, 2024, in conformity with accounting
principles generally accepted in the United States of America.

 
Material
Uncertainty Related to Going Concern
 
The accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred recurring losses from operations,
has negative cash flows from operating activities, working capital deficiency and has an accumulated deficit that raise substantial doubt
about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Basis
for Opinion
 
These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect
to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
 
We conducted our audit in accordance with the standards of the PCAOB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial
reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.
 
Our audit included performing procedures to assess the risks of material misstatement
of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis for our opinion.
 

F-1
 

 


 
Critical
Audit Matters
 
The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
 
Valuation
of Derivative Liabilities
 
Critical
Audit Matter Description
 
As described further in Notes 5 and 8 to the financial statements, the Company
determined that the conversion features and redemption features of its convertible promissory notes, certain warrants, and Series A and
Series B preferred shares, issued in conjunction with financing arrangements required to be accounted for as derivative liabilities. The
derivative liabilities are recorded at fair value when issued and subsequently re-measured to fair value each reporting period. These
derivatives require valuation techniques that may include complex models and non-observable inputs, requiring management’s estimation
and judgment.
 
How
the Critical Audit Matter was Addressed in the Audit
 
To
test the valuation of the derivative liabilities, our audit procedures included, among others, reviewing the terms of the underlying
instruments, testing management’s process for developing the fair value measurement, evaluating the appropriateness of the methodologies
used in the valuation model and testing the reasonableness of the significant assumptions and inputs used. We have also evaluated the
financial statement disclosures related to these matters.
 
Accounting and classification of mezzanine equity
 
Critical Audit Matter Description
 
As
described further in Note 9 to the financial statements, the Company identified that the Series B preferred shares are required to be
accounted for and classified as mezzanine equity. The accounting and classification of Series B preferred shares requires significant
management judgment in applicable accounting guidance in these areas and the significant nature of the financing arrangement.
 
How the Critical Audit Matter was Addressed in
the Audit
 
To
test the accounting and classification related to the mezzanine equity, our audit procedures included, among others, examining and evaluating
the underlying financing terms and agreements, and assessing the Company’s analysis of the accounting of the mezzanine equity,
in accordance with relevant accounting standards. We have also evaluated the financial statement disclosures related to these matters.
 


 
/s/
    SRCO Professional Corporation

 
 

We
    have served as the Company’s auditor since 2015
Richmond
    Hill, Ontario, Canada
June
    26, 2024
CHARTERED
    PROFESSIONAL ACCOUNTANTS
Authorized
    to practice public accounting by the
Chartered
    Professional Accountants of Ontario

 

F-2
 


 
BIOTRICITY
INC.
CONSOLIDATED
BALANCE SHEETS
(Expressed
in US Dollars)


 



  
As at March 31, 2024  
As at March 31, 2023 

  
As at March 31, 2024  
As at March 31, 2023 

  
 $  
 $ 

CURRENT ASSETS 
    
   

Cash 
 786,060  
 570,460 

Accounts receivable, net 
 1,468,655  
 1,224,137 

Inventory [Note 3] 
 1,879,402  
 2,337,006 

Deposits and other receivables 
 336,456  
 588,599 

Total current assets 
 4,470,573  
 4,720,202 

  
    
   

Deposits and other receivables [Note 12] 
 85,000  
 85,000 

Long-term accounts receivable 
 149,907  
 96,344 

Property and equipment [Note 13] 
 15,552  
 21,506 

Operating right of use assets [Note 12] 
 1,221,593  
 1,587,492 

TOTAL ASSETS 
 5,942,625  
 6,510,544 

  
    
   

CURRENT LIABILITIES 
    
   

Accounts payable and accrued liabilities [Note 4] 
 9,613,118  
 5,042,476 

Convertible promissory notes and short term loans [Note 5] 
 9,236,471  
 4,774,468 

Term loan, current 
 2,400,000  
 — 

Derivative liabilities [Note 8] 
 991,866  
 1,008,216 

Operating lease obligations, current [Note 10] 
 457,371  
 335,608 

Total current liabilities 
 22,698,826  
 11,160,768 

  
    
   

Federally guaranteed loans [Note 7] 
 870,800  
 870,800 

Term loan [Note 6] 
 9,985,033  
 12,178,809 

Derivative liabilities [Note 8] 
 1,435,668  
 759,065 

Operating lease obligations 
 929,115  
 1,386,487 

TOTAL LIABILITIES 
 35,919,442  
 26,355,929 

  
    
   

MEZZANINE EQUITY 
    
   

Series B Convertible Redeemable preferred stock, $0.001
par value, 600
and no
    shares authorized as of March 31, 2024 and March 31, 2023, respectively, 265
    and no
    shares issued and outstanding as of March 31, 2024 and March 31, 2023, respectively [Note 9] 
 1,488,920  
 — 

  
    
   

STOCKHOLDERS’  DEFICIENCY 
    
   

Preferred stock, $0.001
par value, 9,979,400
    and 9,980,000
    shares authorized as of March 31, 2024 and March 31, 2023, respectively, 1
    share issued and outstanding as of March 31, 2024 and March 31, 2023 [Note 9] 
 1  
 1 

Preferred stock, $0.001
par value, 20,000
    and 20,000 authorized as at March 31, 2024 and March 31, 2023, respectively, 6,304
    and 6,304
    preferred shares issued and outstanding as at March 31, 2024 and as at March 31, 2023, respectively [Note 9] 
 6  
 6 

Preferred stock, value 
 6  
 6 

Common stock, $0.001 par value, 125,000,000 authorized as at March 31, 2024 and March 31, 2023, respectively. Issued and outstanding common shares: 9,353,768 and 8,508,052 as at March 31, 2024 and March 31, 2023, respectively, and exchangeable shares of 160,672 and 244,458 outstanding as at March 31, 2024 and March 31, 2023, respectively [Note 9] 
 9,515  
 8,753 

Shares to be issued (344,276 and 3,955 shares of common stock as at March 31, 2024 and March 31, 2023, respectively) [Note 9] 
 269,065  
 24,999 

Additional paid-in-capital 
 95,723,083  
 92,844,478 

Accumulated other comprehensive gain (loss) 
 32,378  
 (152,797)

Accumulated deficit 
 (127,499,785) 
 (112,570,825)

Total stockholders’ deficiency 
 (31,465,737) 
 (19,845,385)

TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIENCY 
 5,942,625  
 6,510,544 

 
Commitments
and contingencies [Note 11]
 
Subsequent
events [Note 14]
 
See
accompanying notes to consolidated financial statements

 

F-3
 


 

BIOTRICITY
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed
in US Dollars)
 


  
Year Ended  March 31, 2024  
Year Ended March 31, 2023 

  
   
  

  
$  
$ 

  
   
  

REVENUE 
 12,063,345  
 9,639,057 

  
    
   

Cost of Revenue 
 3,707,064  
 4,197,024 

GROSS PROFIT 
 8,356,281  
 5,442,033 

  
    
   

EXPENSES 
    
   

Selling, general and administrative expenses 
 14,612,724  
 17,621,865 

Research and development expenses 
 2,571,826  
 3,229,879 

TOTAL OPERATING EXPENSES 
 17,184,550  
 20,851,744 

LOSS FROM OPERATIONS 
 (8,828,269) 
 (15,409,711)

  
    
   

Other income/(expense) [Notes
    3, 5] 
 (102,607) 
 (110,822)

Interest expense [Notes 5, 6, 7] 
 (3,018,803) 
 (1,839,159)

Gain/(Loss) upon convertible promissory notes conversion and redemption [Note 5] 
 18,539  
 (71,119)

Accretion and amortization
    expenses [Notes 5, 6] 
 (2,172,920) 
 (743,459)

Change in fair value of derivative liabilities [Note 8] 
 9,777  
 (483,873)

NET LOSS BEFORE INCOME TAXES 
 (14,094,283) 
 (18,658,143)

  
    
   

Income taxes [Note 10] 
 —  
 — 

NET LOSS BEFORE DIVIDENDS 
 (14,094,283) 
 (18,658,143)

  
    
   

Preferred Stock Dividends 
 (834,677) 
 (875,540)

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS 
 (14,928,960) 
 (19,533,683)

  
    
   

Translation adjustment 
 185,175  
 615,859 

  
    
   

COMPREHENSIVE LOSS 
 (14,743,785) 
 (18,917,824)

  
    
   

LOSS PER SHARE, BASIC AND DILUTED 
 (1.660) 
 (2.256)

  
    
   

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 
 8,991,766  
 8,659,718 

 
See
accompanying notes to the consolidated financial statements
 

F-4
 

 
BIOTRICITY,
INC.
CONSOLIDATED
STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIENCY
(Expressed
in US Dollars)
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares  
$  
Shares  
$  
Shares  
$  
$  
$  
$  
$ 

  
Mezzanine
Equity
 
 
Total Mezzanine Equity
 
 
 
 
Preferred stock  
Common stock and exchangeable common shares  
Shares to be Issued  
Additional paid in capital  
Accumulated other comprehensive (loss) income  
Accumulated deficit  
Total
 Stockholders’ Deficiency 

  
Shares
 
 
$
 
 
$
 
 
 
 
Shares  
$  
Shares  
$  
Shares  
$  
$  
$  
$  
$ 

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
   
   
   
   
   
   
   
   
  

Balance, March 31, 2023 
 
—
 
 
 
—
 
 
 
—
-
-
 
 
 6,305  
 7  
 8,752,510  
 8,753  
 3,955  
 24,999  
 92,844,478  
 (152,797) 
 (112,570,825) 
 (19,845,385)

Issuance of common shares to adjust for rounding effect of Reverse  Split [Note 9] 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 20,846  
 21  
 —  
 —  
 (21) 
 —  
 —  
 — 

Issuance of common shares for private placement [Note 9] 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 36,897  
 37  
 —  
 —  
 119,248  
 —  
 —  
 119,285 

Issuance of mezzanine equity [Note 9] 
 
330
 
 
 
1,860,554
 
 
 
1,860,554
1,860,554
1,860,554
 
 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 — 

Issuance of warrants for private placement holders [Note 9] 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 —  
 —  
 —  
 —  
 1,137,716  
 —  
 —  
 1,137,716 

Issuance of warrants for brokers [Note 9] 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 —  
 —  
 —  
 —  
 141,070  
 —  
 —  
 141,070 

Conversion of mezzanine equity into common shares [Note 9] 
 
(65
)
 
 
(371,634
)
 
 
(371,634
 
 
)
 
 —  
 —  
 612,062  
 612  
 320,321  
 228,786  
 353,907  
 —  
 —  
 583,305 

Issuance of shares for services [Note 9] 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 92,125  
 92  
 20,000  
 15,280  
 100,755  
 —  
 —  
 116,127 

Stock based compensation - ESOP [Note 9] 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 —  
 —  
 —  
 —  
 1,025,930  
 —  
 —  
 1,025,930 

Translation adjustment 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 185,175  
 —  
 185,175 

Net loss before dividends for the period 
 
—
 
 
 
—
 
 
 
—
-
-
 
 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 (14,094,283) 
 (14,094,283)

Preferred stock purchased back via cash 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Preferred stock purchased back via cash, shares 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Issuance of warrants for services [Note 9] 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Exercise of warrants for cash [Note 9] 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Exercise of warrants for cash [Note 9], shares 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Exchange of warrants for promissory notes 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Issuance of shares in lieu of convertible note interest [Note 9] 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Issuance of shares in lieu of convertible note
    interest [Note 9], shares 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Cashless exercise of options [Note 9] 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Cashless exercise of
    options [Note 9], shares 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
    
    
    
   

Preferred stock dividends 
 
—
 
 
 
—
 
 
 
—
 
 
 
 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 (834,677) 
 (834,677)

Balance, March 31, 2024 
 
265
 
 
 
1,488,920
 
 
 
1,488,920
-
-
 
 
 6,305  
 7  
 9,514,440  
 9,515  
 344,276  
 269,065  
 95,723,083  
 32,378  
 (127,499,785) 
 (31,465,737)

 


  
   
   
   
   
   
   
   
   
   
  

  
Preferred stock  
Common stock and exchangeable common shares  
Shares to be Issued  
Additional paid in capital  
Accumulated other comprehensive (loss) income  
Accumulated deficit  
Total 

  
Shares  
$  
Shares  
$  
Shares  
$  
$  
$  
$  
$ 

  
   
   
   
   
   
   
   
   
   
  

Balance, March 31, 2022 
 7,201  
 8  
 8,546,261  
 8,546  
 20,638  
 102,299  
 91,550,209  
 (768,656) 
 (93,037,142) 
 (2,144,736)

Balance 
 7,201  
 8  
 8,546,261  
 8,546  
 20,638  
 102,299  
 91,550,209  
 (768,656) 
 (93,037,142) 
 (2,144,736)

Conversion of convertible notes into common
    shares [Note 9] 
 —  
 —  
 126,833  
 127  
 —  
 —  
 843,795  
 —  
 —  
 843,922 

Preferred stock purchased back via cash 
 (896) 
 (1) 
 —  
 —  
 —  
 —  
 (777,174) 
 —  
 —  
 (777,175)

Issuance of shares for services [Note 9] 
 —  
 —  
 22,035  
 22  
 —  
 —  
 150,396  
 —  
 —  
 150,418 

Issuance of warrants for services [Note 9] 
 —  
 —  
 —  
 —  
 —  
 —  
 232,526  
 —  
 —  
 232,526 

Exercise of warrants for cash [Note 9] 
 —  
 —  
 11,966  
 12  
 (16,683) 
 (77,300) 
 47,514  
 —  
 —  
 (29,774)

Exchange of warrants for promissory notes [Note
    9] 
 —  
 —  
 —  
 —  
 —  
 —  
 (71,768) 
 —  
 —  
 (71,768)

Issuance of shares in lieu of convertible note
    interest [Note 9] 
 —  
 —  
 45,043  
 45  
 —  
 —  
 221,351  
 —  
 —  
 221,396 

Stock based compensation - ESOP [Note 9] 
 —  
 —  
 —  
 —  
 —  
 —  
 647,631  
 —  
 —  
 647,631 

Cashless exercise of options [Note 9] 
 —  
 —  
 372  
 1  
 —  
 —  
 (2) 
 —  
 —  
 (1)

Translation adjustment 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 615,859  
 —  
 615,859 

Net loss before dividends for the year 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 (18,658,143) 
 (18,658,143)

Preferred stock dividends 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 (875,540) 
 (875,540)

Balance, March 31, 2023 
 6,305  
 7  
 8,752,510  
 8,753  
 3,955  
 24,999  
 92,844,478  
 (152,797) 
 (112,570,825) 
 (19,845,385)

Balance 
 6,305  
 7  
 8,752,510  
 8,753  
 3,955  
 24,999  
 92,844,478  
 (152,797) 
 (112,570,825) 
 (19,845,385)

 
See
accompanying notes to the consolidated financial statements
 
The consolidated statements of mezzanine
equity and stockholder’s deficiency share amounts have been retroactively adjusted to account for the
Company’s 1:6 Reverse Split, effective July 3, 2023.
 

F-5
 

 
BIOTRICITY
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Expressed
in US dollars)
 


  
Year ended
March 31, 2024  
Year ended  March 31, 2023 

  
   
  

CASH FLOWS FROM OPERATING ACTIVITIES 
    
   

Net loss before dividends 
 (14,094,283) 
 (18,658,143)

Adjustments to reconcile net loss to net cash used in operations 
    
   

Stock based compensation 
 1,025,930  
 647,631 

Issuance of shares for services 
 116,127  
 150,418 

Issuance of warrants for services, at fair value 
 —  
 232,526 

Accretion and amortization expenses 
 2,172,920  
 743,459 

Change in fair value of derivative liabilities 
 (9,777) 
 483,873 

(Gain) Loss  on debt conversion and redemption 
 (18,539) 
 71,119 

Loss on debt and warrant modification 
 59,161  
 126,158 

Property and equipment depreciation 
 5,953  
 5,953 

Non cash lease expense 
 365,899  
 340,307 

  
    
   

Changes in operating assets and liabilities: 
    
   

Accounts receivable, net 
 (298,248) 
 686,197 

Inventory 
 457,604  
 (1,494,082)

Deposits and other receivables 
 252,143  
 (224,819)

Accounts payable and accrued liabilities 
 3,271,198  
 3,341,468 

Net cash used in operating activities 
 (6,693,912) 
 (13,547,935)

  
    
   

CASH FLOWS FROM FINANCING ACTIVITIES 
    
   

Issuance of common shares, net 
 119,285  
 — 

Issuance of preferred shares, net 
 2,825,000  
 — 

Redemption of preferred shares 
 —  
 (895,556)

Exercise of warrants for cash 
 —  
 12,500 

Proceeds from convertible debentures, net 
 2,962,386  
 2,355,318 

Proceeds from short term loan and promissory notes, net 
 853,030  
 1,476,121 

Preferred Stock Dividend 
 (18,016) 
 (946,780)

Net cash provided by financing activities 
 6,741,685  
 2,001,603 

  
    
   

Effect of foreign currency translation 
 167,827  
 49,863 

Net increase (decrease) in cash during the year 
 47,773  
 (11,546,332)

Cash, beginning of year 
 570,460  
 12,066,929 

Cash, end of year 
 786,060  
 570,460 

  
    
   

Supplemental
    disclosure of cash flow information: 
    
   

Interest
    paid 
 2,022,221  
 1,620,012 

Taxes 
 —  
 — 

 
See
accompanying notes to the consolidated financial statements
 

F-6
 


 

BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
1.
NATURE OF OPERATIONS
 
Biotricity
Inc. (formerly MetaSolutions, Inc.) (the “Company” or “Biotricity”) was incorporated under the laws of the State
of Nevada on August 29, 2012. iMedical Innovations Inc. (“iMedical”) was incorporated on July 3, 2014 under the laws of the
Province of Ontario, Canada and became a wholly-owned subsidiary of Biotricity through reverse take-over on February 2, 2016.
 
Both
the Company and iMedical are engaged in research and development activities within the remote monitoring segment of preventative care.
They are focused on a realizable healthcare business model that has an existing market and commercialization pathway. As such, its efforts
to date have been devoted to building and commercializing an ecosystem of technologies that enable access to this market.
 
2.
BASIS OF PRESENTATION, MEASUREMENT AND CONSOLIDATION
 
The
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the
United States of America (“US GAAP”) and are expressed in United States dollars (“USD”).
 
The
consolidated financial statements of the Company have been prepared on a historical cost basis except derivative liabilities which are
carried at fair value.
 
The
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Significant intercompany accounts
and transactions have been eliminated.
 
Reclassifications
 
Certain
amounts presented in the prior year period have been reclassified to conform to current period consolidated financial statement presentation. 
 
Reverse
Split
 
On
June 29, 2023, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation to effect a one-for-six
(1-for-6) share consolidation (the “Reverse Split”). The Reverse Split became effective on July 3, 2023. As a result of the
Reverse Split, every six shares of the Company’s issued and outstanding common stock were automatically converted into one share
of common stock, without any change in the par value per share or to the number of shares authorized and began trading on a post-Reverse
Split basis under the Company’s existing trading symbol, “BTCY,” when the market opened on July 3, 2023. No fractional
shares were outstanding following the Reverse Split. Any holder who would have received a fractional share of common stock was automatically
entitled to receive an additional fraction of a share of common stock to round up to the next whole share: 20,846 shares were
issued for this purpose on July 19, 2023. The Reverse Split does not impact the amount of authorized common stock or par value per share.
Lastly, the Reverse Split does not impact the amount of authorized, issued or outstanding shares of preferred stock.
 
All
issued and outstanding common stock, common stock per share amounts and corresponding balance sheet accounts contained in the financial
statements have been retroactively adjusted to reflect this Reverse Split for all periods presented. In addition, a proportionate adjustment
was made to the per share exercise and conversion price and the number of shares issuable upon the exercise or conversion of all outstanding
stock options, warrants, convertible debt and equity instruments to purchase shares of common stock.
 
Going
Concern, Liquidity and Basis of Presentation
 

The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company
is in the early stages of commercializing its first product and is concurrently in development mode, operating a research and development
program in order to develop, obtain regulatory clearance for, and commercialize other proposed products. The Company has incurred recurring
losses from operations, and as of March 31, 2024, had an accumulated deficit of $127,499,785 and a working capital deficiency of $18,228,253.
Those conditions raise substantial doubt about its ability to continue as a going concern for a period of one year from the issuance
of these consolidated financial statements. The consolidated financial statements do not include adjustments that might result from the
outcome of this uncertainty.



 

F-7
 

 
BIOTRICITY
                                            INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 

Management
anticipates the Company will continue on its revenue growth trajectory and improve its liquidity through continued business development
and after additional equity and debt capitalization of the Company. During fiscal year ended March 31, 2022, the Company raised $499,900
through government EIDL loan. During the fiscal quarter ended September 30, 2021, the
Company also raised total net proceeds of $14,545,805 through the underwritten public offering that was concurrent with its listing onto
the Nasdaq Capital Markets. During the fiscal quarter ended December 31, 2021, the Company
raised additional net proceeds of $11,756,563 through a term loan transaction (Note 6) and made repayment of the previously issued promissory
notes and short-term loans. In connection with this loan, the Company and Lender entered into a Guarantee and Collateral Agreement, as
well as an Intellectual Property Security Agreement, wherein the Company agreed to secure the Credit Agreement with all of the Company’s
assets, as well as secured by the Company’s right title and interest in the Company’s Intellectual Property. During the fiscal
year ended March 31, 2023, the Company raised short-term loans and promissory notes, net of repayments of $1,476,121 from various lenders,
and also raised convertible notes, net of redemptions of $2,355,318 from various lenders.
 
During
the fiscal year ended March 31, 2024, the Company raised short-term loans and promissory notes, net of repayments of $853,030 and convertible
notes, net of redemptions of $ 2,962,386 from various lenders. The Company sold 36,897 common shares through use of its registration
statement, for gross proceeds of $123,347, raising a net amount of $119,285 after paying a 3% placement fee and other issuance expenses.
 
Additionally,
on September 19, 2023, the Company entered into a security purchase agreement with an institutional investor for the issuance and sale
of 220 shares of the Company’s newly designated Series B Convertible Preferred Stock, $0.001 par value (the “Series B Preferred
Stock”), at a purchase price of $9,091 per share of Series B Preferred Stock (Note 9), or gross proceeds of $2,000,000. Net proceeds
after issuance costs amounted to $1,900,000 for the Series B Preferred Stock. During the three months ended March 31, 2024, a further
110 Series B preferred shares were issued. The net proceeds received was in the amount of $925,000.
 
Shares
of Series B Preferred Stock and shares of common stock of the Company that are issuable upon conversion of, or as dividends on, the Series
B Preferred Stock were offered and were issued pursuant to the Prospectus Supplement, filed September 19, 2023, to the Prospectus included
in the Company’s Registration Statement on Form S-3 (Registration No. 333-255544) filed with the Securities and Exchange Commission
on April 27, 2021, and declared effective May 4, 2021.
 
As
we proceed with the commercialization of the Bioflux, Biocore, and Biocare product development, we expect to continue to devote significant
resources on capital expenditures, as well as research and development costs and operations, marketing and sales expenditures.
 
Based
on the above facts and assumptions, we believe our existing cash, along with anticipated near-term financings, will be sufficient to
continue to meet our needs for the next twelve months from the filing date of this report. However, we will need to seek additional debt
or equity capital to respond to business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual
property, developing or acquiring new lines of business and enhancing our operating infrastructure. The terms of our future financings
may be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek additional funds through arrangements
with collaborators or other third parties. There can be no assurance we will be able to raise this additional capital on acceptable terms,
or at all. If we are unable to obtain additional funding on a timely basis, we may be required to modify our operating plan and otherwise
curtail or slow the pace of development and commercialization of our proposed product lines.
 

F-8
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Revenue
Recognition
 
The
Company adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”)
on April 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in an
amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by applying
the core principles – (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3)
determine the transaction price, (4) allocate the transaction price to performance obligations in the contract, and (5) recognize revenue
as performance obligations are satisfied.
 
Both
the Bioflux mobile cardiac telemetry device, and the Biocore device are wearable devices. The cardiac data that the devices monitor and
collect is curated and analyzed by the Company’s proprietary algorithms and then securely communicated to a remote monitoring facility
for electronic reporting and conveyance to the patient’s prescribing physician or other certified cardiac medical professional.
Revenues earned are comprised of device sales revenues and technology fee revenues (technology as a service). The devices, together with
their licensed software, are available for sale to the medical center or physician, who is responsible for the delivery of clinical diagnosis
and therapy. The remote monitoring, data collection and reporting services performed by the technology culminate in a patient study that
is generally billable when it is complete and is issued to the physician. In order to recognize revenue, management considers whether
or not the following criteria are met: persuasive evidence of a commercial arrangement exists, and delivery has occurred or services
have been rendered. For sales of devices, which are invoiced directly, additional revenue recognition criteria include that the price
is fixed and determinable and collectability is reasonably assured; for device sales contracts with terms of more than one year, the
Company recognizes any significant financing component as revenue over the contractual period using the effective interest method, and
the associated interest income is reflected accordingly on the statement of operations and included in other income; for revenue that
is earned based on customer usage of the proprietary software to render a patient’s cardiac study, the Company recognizes revenue
when the study ends based on a fixed billing rate. Costs associated with providing the services are recorded as the service is provided
regardless of whether or when revenue is recognized.
 
The
Company may also earn service-related revenue from contracts with other counterparties with which it consults. This contract work is
separate and distinct from services provided to clinical customers, but may be with a reseller or other counterparties that are working
to establish their operations in foreign jurisdictions or ancillary products or market segments in which the Company has expertise and
may eventually conduct business.
 
The
Company recognized the following forms of revenue for the fiscal years ended March 31, 2024 and 2023:
SCHEDULE
OF REVENUE RECOGNITION


  
2024  
2023 

  
$  
$ 

Technology fees 
 11,249,113  
 8,802,032 

Device sales 
 814,232  
 837,025 

 Total 
 12,063,345  
 9,639,057 

 

F-9
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Inventories
 
Inventory
is stated at the lower of cost and market value, cost being determined on a weighted average cost basis. Market value of our finished
goods inventory and raw material inventory is determined based on its estimated net realizable value, which is generally the selling
price less normally predictable costs of disposal and transportation. The Company records write-downs of inventory that is obsolete or
in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development
plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences
may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost
basis for the inventory.
SCHEDULE
OF INVENTORIES


  
2024  
2023 

  
$  
$ 

Raw material 
 1,128,700  
 1,186,735 

Finished goods 
 750,702  
 1,150,271 

  
    
   

 Inventories 
 1,879,402  
 2,337,006 

 
Significant
accounting estimates and assumptions
 
The
preparation of the consolidated financial statements requires the use of estimates and assumptions to be made in applying the accounting
policies that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities.
The estimates and related assumptions are based on previous experiences and other factors considered reasonable under the circumstances,
the results of which form the basis for making the assumptions about the carrying values of assets and liabilities that are not readily
apparent from other sources.
 
The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period
in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
 
Significant
accounts that require estimates as the basis for determining the stated amounts include share-based compensation, impairment analysis
and fair value of warrants, promissory notes, convertible notes and derivative liabilities.
 


●
Fair
    value of stock options

 
The
Company measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date
at which they are granted. Estimating fair value for share-based payments requires determining the most appropriate valuation model for
a grant of such instruments, which is dependent on the terms and conditions of the grant. The estimate also requires determining the
most appropriate inputs to the Black-Scholes option pricing model, including the expected life of the instrument, risk-free rate, volatility,
and dividend yield.
 


●
Fair
    value of warrants

 
In
determining the fair value of the warrant issued for services and issue pursuant to financing transactions, the Company used the Black-Scholes
option pricing model with the following assumptions: volatility rate, risk-free rate, and the remaining expected life of the warrants
that are classified under equity.
 

F-10
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 


●
Fair
    value of derivative liabilities

 
In
determining the fair values of the derivative liabilities from the conversion and redemption features, the Company used Monte-Carlo and
lattice models with the following assumptions: dividend yields, volatility, risk-free rate and the remaining expected life. Changes in
those assumptions and inputs could in turn impact the fair value of the derivative liabilities and can have a material impact on the
reported loss and comprehensive loss for the applicable reporting period.
 


●
Functional
    currency

 
Determining
the appropriate functional currencies for entities in the Company requires analysis of various factors, including the currencies and
country-specific factors that mainly influence labor, materials, and other operating expenses.
 


●
Useful
    life of property and equipment

 
The
Company employs significant estimates to determine the estimated useful lives of property and equipment, considering industry trends
such as technological advancements, past experience, expected use and review of asset useful lives. The Company makes estimates when
determining depreciation methods, depreciation rates and asset useful lives, which requires considering industry trends and company-specific
factors. The Company reviews depreciation methods, useful lives and residual values annually or when circumstances change and adjusts
its depreciation methods and assumptions prospectively.
 


●
Provisions

 
Provisions
are recognized when the Company has a present obligation, legal or constructive, as a result of a previous event, if it is probable that
the Company will be required to settle the obligation and a reliable estimate can be made of the obligation. The amount recognized is
the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligations. Provisions are reviewed at the end of each reporting period and adjusted to
reflect the current best estimate of the expected future cash flows.
 


●
Contingencies

 
Contingencies
can be either possible assets or possible liabilities arising from past events, which, by their nature, will be resolved only when one
or more uncertain future events occur or fail to occur. The assessment of the existence and potential impact of contingencies inherently
involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.
 


●
Inventory
    obsolescence

 
Inventories
are stated at the lower of cost and market value. Market value of our inventory, which is all purchased finished goods, is determined
based on its estimated net realizable value, which is generally the selling price less normally predictable costs of disposal and transportation.
The Company estimates net realizable value as the amount at which inventories are expected to be sold, taking into consideration fluctuations
in retail prices less estimated costs necessary to make the sale. Inventories are written down to net realizable value when the cost
of inventories is estimated to be unrecoverable due to obsolescence, damage, or declining selling prices.
 

F-11
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 


●
Income
    and other taxes

 
The
calculation of current and deferred income taxes requires the Company to make estimates and assumptions and to exercise judgment regarding
the carrying values of assets and liabilities which are subject to accounting estimates inherent in those balances, the interpretation
of income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary
differences and possible audits of income tax filings by the tax authorities. In addition, when the Company incurs losses for income
tax purposes, it assesses the probability of taxable income being available in the future based on its budgeted forecasts. These forecasts
are adjusted to take into account certain non-taxable income and expenses and specific rules on the use of unused credits and tax losses.
 
When
the forecasts indicate that sufficient future taxable income will be available to deduct the temporary differences, a deferred tax asset
is recognized for all deductible temporary differences. Changes or differences in underlying estimates or assumptions may result in changes
to the current or deferred income tax balances on the consolidated balance sheets, a charge or credit to income tax expense included
as part of net income (loss) and may result in cash payments or receipts. Judgment includes consideration of the Company’s future
cash requirements in its tax jurisdictions. All income, capital and commodity tax filings are subject to audits and reassessments. Changes
in interpretations or judgments may result in a change in the Company’s income, capital, or commodity tax provisions in the future.
The amount of such a change cannot be reasonably estimated.
 


●
Incremental
    borrowing rate for lease

 
The
determination of the Company’s lease obligation and right-of-use asset depends on certain assumptions, which include the selection
of the discount rate. The discount rate is set by reference to the Company’s incremental borrowing rate. Significant assumptions
are required to be made when determining which borrowing rates to apply in this determination. Changes in the assumptions used may have
a significant effect on the Company’s consolidated financial statements.
 
Earnings
(Loss) Per Share
 
The
Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)
Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic loss per share
of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average
shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive.
The Company’s warrants, options, convertible promissory notes, convertible preferred stock, shares to be issued and restricted
stock awards while outstanding are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury
method for the warrants, stock options, shares to be issued and restricted stock awards. Diluted earnings with respect to the convertible
promissory notes and convertible preferred stock utilizing the if-converted method was not applicable during the periods presented as
no conditions required for conversion had occurred. No incremental common stock equivalents were included in calculating diluted loss
per share because such inclusion would be anti-dilutive given the net loss reported for the periods presented.
 

F-12
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Cash
 
Cash
includes cash on hand and balances with banks.
 
Foreign
Currency Translation
 
The
functional currency of the Company’s Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S.
dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the
exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are
translated using the exchange rate prevailing at the consolidated balance sheet date. Non-monetary assets and liabilities are
translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these
foreign currency transactions are included in net income (loss) for the year. In translating the financial statements of the
Company’s Canadian subsidiary from their functional currency into the Company’s reporting currency of United States
dollars, consolidated balance sheet accounts are translated using the closing exchange rate in effect at the consolidated balance
sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period.
Adjustments resulting from the translation, if any, are included in accumulated other comprehensive loss in stockholders’
deficiency. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to
offset the impact of foreign currency fluctuations.
 
Accounts
Receivable
 
Accounts
receivable consists of amounts due to the Company from medical facilities, which receive reimbursement from institutions and third-party
government and commercial payors and their related patients, as a result of the Company’s normal business activities. Accounts
receivable is reported on the consolidated balance sheets net of an estimated allowance for doubtful accounts. The Company establishes
an allowance for doubtful accounts for estimated uncollectible receivables based on historical experience, assessment of specific risk,
review of outstanding invoices, and various assumptions and estimates that are believed to be reasonable under the circumstances, and
recognizes the provision as a component of selling, general and administrative expenses. Uncollectible accounts are written off against
the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible.
 
Fair
Value of Financial Instruments
 
ASC
820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements
of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels
of inputs that may be used to measure fair value:
 
●
Level 1 – Valuation based on quoted market prices in active markets for identical assets or liabilities.
 
●
Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets.
 
●
Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s
best estimate of what market participants would use as fair value.
 

F-13
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
In
instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy,
the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is
significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
 
Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The
respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term
nature of these instruments or interest rates that are comparable to market rates. These financial instruments include cash,
accounts receivable, deposits and other receivables, convertible promissory notes and short term loans, federally guaranteed loans,
term loans and accounts payable and accrued liabilities. The Company’s derivative liabilities are carried at fair values and
are classified as Level 3 financial instruments. The Company’s bank accounts are maintained with financial institutions of
reputable credit, therefore, bear minimal credit risk.
 
The
fair value of financial instruments measured on a recurring basis is as follows:
SCHEDULE
OF FAIR VALUE OF FINANCIAL INSTRUMENTS


  
As
    of March 31, 2024 

Description 
Total  
Level
    1  
Level
    2  
Level
    3 

Assets: 
    
    
    
   

Cash 
$786,060  
$786,060  
$—  
$— 

Total assets at fair value 
$786,060  
$786,060  
$—  
$— 

  
    
    
    
   

Liabilities: 
    
    
    
   

Derivative liabilities, short-term 
$991,866  
$—  
$—  
$991,866 

Derivative liabilities,
    long-term 
 1,435,668  
 —  
 —  
 1,435,668 

Total liabilities at
    fair value 
$2,427,534  
$—  
$—  
$2,427,534 

 


  
As
    of March 31, 2023 

Description 
Total  
Level
    1  
Level
    2  
Level
    3 

Assets: 
    
    
    
   

Cash 
$570,460  
$570,460  
$—  
$— 

Total assets at fair value 
$570,460  
$570,460  
$—  
$— 

  
    
    
    
   

Liabilities: 
    
    
    
   

Derivative liabilities, short-term 
$1,008,216  
$—  
$—  
$1,008,216 

Derivative liabilities,
    long-term 
 759,065  
 —  
 —  
 759,065 

Total liabilities at
    fair value 
$1,767,281  
$—  
$—  
$1,767,281 

 
There
were no transfers between fair value hierarchy levels during the years ended March 31, 2024 and 2023.
 
Property
and Equipment
 
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of
the assets. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. Depreciation
of property and equipment is provided using the straight-line method for all assets with estimated lives as follow:
 
SCHEDULE
OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES


 
Office
    equipment
5
    years

 
Leasehold
    improvement
5
    years

 

F-14
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Impairment
for Long-Lived Assets
 
The
Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets, including right-of-use
assets, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying
amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner,
except that fair values are reduced for the cost of disposal. Based on its review at March 31, 2024 and 2023, the Company believes there
was no impairment of its long-lived assets.
 
Leases
 
The
Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line
items Operating right of use assets, Operating lease obligations, current, and Operating lease obligations, long-term in the consolidated balance sheet.
 
Right-of-use
(“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent
the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value
of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception
are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in the consolidated
statement of operations and comprehensive loss. The Company determines the lease term by agreement with lessor. As the Company’s
lease does not provide implicit interest rate, the Company uses the Company’s incremental borrowing rate based on the information
available at commencement date in determining the present value of future payments. Refer to Note 12 for further discussion.
 
Income
Taxes
 
The
Company accounts for income taxes in accordance with ASC 740. The Company provides for Federal, State and Provincial income taxes payable,
as well as for those deferred because of the timing differences between reporting income and expenses for consolidated financial statement
purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or
expense in the period of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the
amount that is more likely than not to be realized.
 
Research
and Development
 
Research
and development costs, which relate primarily to product and software development, are charged to operations as incurred. Under certain
research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement
of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments
made to third parties are expensed when the milestone is achieved. Milestone payments made to third parties after regulatory approval
is received are capitalized and amortized over the estimated useful life of the approved product.
 

F-15
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Selling,
General and Administrative
 
Selling,
general and administrative expenses consist primarily of personnel-related costs including stock-based compensation for personnel in
functions not directly associated with research and development activities. Other significant costs include sales and marketing costs,
investor relation and legal costs relating to corporate matters, professional fees for consultants assisting with business development
and financial matters, and office and administrative expenses.
 
Stock
Based Compensation
 
The
Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued
to acquire goods or services, including grants of employee stock options, be recognized in the consolidated statements of operations
and comprehensive loss based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the
time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense
related to share-based awards is recognized over the requisite service period, which is generally the vesting period.
 
The
Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the
fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable,
using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management,
accounting, operations, corporate communication, financial and administrative consulting services.
 
Convertible
Notes Payable and Derivative Instruments
 
The
Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective
as of April 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated
balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting
period. Previously, the Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally
requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them
as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments,
are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion
options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC
470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company
records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair
value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the
note. Debt discounts under these arrangements are amortized over the term of the related debt.
 
Series
B Convertible Preferred Stock
 
The
Series B convertible preferred stock (“Series B Preferred Stock”) was accounted for as mezzanine equity and the embedded
conversion and redemption features was accounted for as derivative liabilities with change in fair value at each reporting period end
charged to the consolidated statement of operation and comprehensive loss in accordance with ASC 480 and ASC 815.
 

F-16
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Preferred
Share Redemption and Conversions
 
The
Company accounted for preferred stock redemptions and conversions in accordance to ASU-260-10-S99. For Series A preferred stock redemptions,
the difference between the fair value of consideration transferred to the holders of the preferred stock and the carrying amount of the
preferred stock is accounted as deemed dividend distribution and subtracted from net loss. For Series B preferred stock conversions,
no gain or loss is recognized upon Series B preferred stock conversion except for the fair value adjustment for the conversion and redemption
feature derivative liabilities on the conversion date.
 

Segment
Information
 
Operating
segments are defined as components of an entity where discrete financial information is evaluated regularly by the chief operating decision
maker in deciding how to allocate resources and assessing performance. The Company has identified its Chief Executive Officer (“CEO”)
as the chief operating decision maker (“CODM”). The Company operates in one operating segment. The Company’s CODM allocates
resources and assesses performance at the consolidated level. The Company’s property and equipment and operating right of use lease
asset are in the United States as of March 31, 2024 and 2023.
 
Recently
Issued Accounting Pronouncements
 
In
June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial
Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment
model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized
cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance
to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on
the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current
conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within
those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit
Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller
reporting companies applying the credit losses (CECL), the revised effective for fiscal years beginning after December 15, 2022. The Company has adopted Topic 326 on the Company’s consolidated financial
statements according to the effective date and the adoption has no significant impact on the Company’s consolidated financial statements.
 
In
December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies
the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current
guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021.
Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a
retrospective or modified retrospective basis. There is no significant impact from adopting ASU 2019-12 on the Company’s financial
condition, results of operations, and cash flows.
 
In
April 2021, The FASB issued ASU 2021-04 to codify the final consensus reached by the Emerging Issues Task Force (EITF) on how an issuer
should account for modifications made to equity-classified written call options (hereafter referred to as a warrant to purchase the issuer’s
common stock). The guidance in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause
the warrant to become liability-classified as an exchange of the original warrant for a new warrant. This guidance applies whether the
modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance
of a new warrant. The Company adopted this guidance for the fiscal year beginning April 1, 2022. There is no significant impact from
adopting ASU 2021-04 on the Company’s financial condition, results of operations, and cash flows.
 
On
March 28, 2023, the FASB issued ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements. ASU 2023-01 is designed to clarify
the accounting for leasehold improvements associated with common control leases, thereby reducing diversity in practice. The new standard
is effective for the Company for its fiscal year beginning January 1, 2024, with early adoption permitted. The Company is currently evaluating
the impact of adopting the standard.
 
In
November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures (“ASU 2023-07”) to improve the disclosures regarding a public entity’s reportable
segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. The
Company is required to adopt the guidance in the fourth quarter of fiscal 2025, though early adoption is permitted. The Company is currently
evaluating the impact of this amendment on its consolidated financial statements.
 
In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures (“ASU 2023-09”)
to provide disaggregated income tax disclosures on rate reconciliation and income taxes paid. The Company is required to adopt the guidance
in the fourth quarter of fiscal 2026, though early adoption is permitted. The Company is currently evaluating the impact of this amendment
on its consolidated financial statements.

 
The
Company continue to evaluate the impact of the new accounting pronouncement, including enhanced disclosure requirements, on our business
processes, controls and systems.
 

F-17
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
4.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 SCHEDULE
OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES


  
As
                                            at March
                                            31, 2024    
As
                                            at March
                                            31, 2023 

  
$  
$ 

Trade and other payables 
 5,221,992  
 3,435,123 

Accrued liabilities 
 4,369,576  
 1,607,353 

Deferred revenue 
 21,550  
 - 

 Total 
 9,613,118  
 5,042,476 

 
Trade
and other payables and accrued liabilities as at March 31, 2024 and 2023 included $837,945
and $446,771,
respectively, due to a shareholder, who is a director and executive of the Company.
 
5.
CONVERTIBLE PROMISSORY NOTES AND SHORT TERM LOANS
 SCHEDULE
OF CONVERTIBLE NOTES


  
2024  
2023 

  
Fiscal
    Year 

  
2024  
2023 

  
$  
$ 

Balance,
    beginning of year 
 4,774,468  
 1,540,000 

Conversion to common shares (Note 9) 
 -  
 (555,600)

Redemption of convertible notes 
 (135,710) 
 (126,680)

Convertible note extinguishment 
 -  
 (500,000)

New issuance of convertible note, net of discounts 
 1,373,813  
 2,335,243 

New issuance of short-term loan and promissory
    notes, net of discounts 
 4,813,543  
 2,444,480 

Repayment of short-term loans 
 (2,446,690) 
 (440,470)

Accretion and amortization
    of discounts 
 857,047  
 77,495 

Balance,
    end of year 
 9,236,471  
 4,774,468 

 
Interest
expense on the above debt instruments was $1,005,005 and $159,602 for the years ended March 31, 2024 and 2023, respectively.
 
Series
A Convertible Promissory Notes:
 
During
the year ended March 31, 2021, the Company issued $11,275,500 (face value) in two series of convertible promissory notes (the “Series
A Notes”) sold under subscription agreements to accredited investors. The Notes mature one year from the final closing date of
the offering and accrue interest at 12% per annum.
 
For
the first series of Series A Notes, commencing six months following the Issuance Date, and at any time thereafter (provided the Holder
has not received notice of the Company’s intent to prepay the note), at the sole election of the Holder, any amount of the outstanding
principal and accrued interest of this note (the “Outstanding Balance”) could be converted into that number of shares of
Common Stock equal to: (i) the Outstanding Balance divided by (ii) 75% of the volume weighted average price of the Common Stock for the
5 trading days prior to the Conversion Date (the conversion price).
 

F-18
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
For
the first series of Series A Notes, the notes would automatically convert into common stock (in each case, subject to the trading volume
of the Company’s common stock being a minimum of $500,000 for each trading day in the 20 consecutive trading days immediately preceding
the conversion date), upon the earlier to occur of (i) the Company’s common stock being listed on a national securities exchange,
in which event the conversion price would be equal to 75% of the volume weighted average price of the common stock for the 20 trading
days prior to the conversion date, or (ii) upon the closing of the Company’s next equity round of financing for gross proceeds
of greater than $5,000,000, in which event the conversion price would be equal to 75% of the price per share of the common stock (or
of the conversion price in the event of the sale of securities convertible into common stock) sold in such financing. The Company could,
at its discretion, redeem the notes for 115% of their face value plus accrued interest.
 
For
the second series of Series A Notes, the notes could be converted into shares of common stock, at the option of the holder, commencing
six months from issuance, at a conversion price equal to the lower of $24.00 per share or 75% of the volume weighted average price of
the common stock for the five trading days prior to the conversion date.
 
For
the second series of Series A Notes, the notes would automatically convert into common stock (in each case, subject to the trading volume
of the Company’s common stock being a minimum of $500,000 for each trading day in the 20 consecutive trading days immediately preceding
the conversion date), upon the earlier to occur of (i) the Company’s common stock being listed on a national securities exchange,
in which event the conversion price would be equal to the lower of $24.00 per share or 75% of the volume weighted average price of the
common stock for the 20 trading days prior to the conversion date, or (ii) upon the closing of the Company’s next equity round
of financing for gross proceeds of greater than $5,000,000, in which event the conversion price would be equal to the lower of $24.00
per share or 75% of the price per share of the common stock (or of the conversion price in the event of the sale of securities convertible
into common stock) sold in such financing. The Company could, at its discretion, redeem the notes for 115% of their face value plus accrued
interest.
 
The
Company was obligated to issue warrants that accompany the convertible notes and provide 50% warrant coverage. The warrants have a 3-year
term from date of issuance and an exercise price that is 120% of the 20-day volume weighted average price of the Company’s common
shares at the time final closing.
 
The
Company was obligated to pay the placement agent of the first series of Series A Notes a 12% cash fee for $8,925,500 (face value) of
the notes and 2.5% cash fee and other sundry expenses for the remaining $2,350,000 (face value) of the notes.
 
The
Company was also obligated to issue warrants to the placement agent that have a 10-year term and cover 12% of funds raised for $8,925,550
(face value) of the notes (first series) and 2.5% of funds raised for the remaining $2,350,000 (face value) of notes (second series),
with an exercise price that is 120% of the 20-day volume weighted average price of the Company’s common shares at the time final
closing. On final closing, which occurred on January 8, 2021, the warrants’ exercise price was struck at $6.36 per share.
 
Prior
to January 8, 2021 (final closing date), the Company determined that the conversion and redemption features contained in those Notes
represented a single compound derivative liability that meets the requirements for liability classification under ASC 815. The Company
accounted for these obligations by determining the fair value of the related derivative liabilities associated with the embedded conversion
and redemption features.
 
For
the Series A Notes, The Company recognized debt issuance costs in the amount of $2,301,854 and treated these as a deduction from the
convertible note liabilities directly, as a contra-liability, and amortized the debt issuance cost over the term of the Notes. The Company
also recognized initial debt discount in the amount of $8,088,003 and accreted the interest over the remaining lives of those Notes.
The debt issuance costs were fully amortized by March 31, 2022.
 

F-19
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
On
December 30, 2022, the Company exchanged $500,000 of Series A Notes along with its outstanding interest accrual of $121,500 into a new
convertible note with the same note holder. The new convertible note has principal of $621,500, stated interest rate of 12% per annum,
as well as option to convert outstanding principal and accrued interest at the conversion price, calculated at 75% multiplied by the
average of the three lowest closing prices during the previous ten trading days prior to the receipt of the conversion notice. The new
convertible note matured on December 30, 2023.
 
Prior to year ended March 31, 2022, $10,575,500 face value of the Series A note was converted into common shares. As of March 31, 2022,
the remaining face value was in the amount of $700,000.
 
During
the year ended March 31, 2024, the Company recognized discount amortization of $49,393 as accretion and amortization expense. As of March
31, 2024, the discount on Series A convertible notes was fully amortized.
 
As
of March 31, 2024, and March 31, 2023, the Company recorded $173,762 and $74,912, respectively, of interest accruals for the Series A
Notes.
 
During
the years ended March 31, 2024, and March 31, 2023, the Company recognized interest expense in the amount of $98,850
and $100,556,
respectively.
 
Series
B Convertible Notes
 
During
the year ended March 31, 2021, the Company also issued $1,312,500 (face value) of convertible promissory notes (“Series B Notes”)
to various accredited investors.
 
Commencing
six months following the issuance date, and at any time thereafter, subject to the Company’s Conversion Buyout clause, at the sole
election of the holder, any amount of the outstanding principal and accrued interest of the note (the “outstanding balance”)
could be converted into that number of shares of Common Stock equal to: (i) the outstanding balance divided by (ii) the Conversion Price.
Partial conversions of the note shall have the effect of lowering the outstanding principal amount of the note. The holder may exercise
such conversion right by providing written notice to the Company of such exercise in a form reasonably acceptable to the Company (a “conversion
notice”). Conversion price means (subject in all cases to proportionate adjustment for stock splits, stock dividends, and similar
transactions), seventy-five percent (75%) multiplied by the average of the three (3) lowest closing prices during the previous ten (10)
trading days prior to the receipt of the conversion notice.
 
The
Series B Notes will automatically convert into common stock upon a merger, consolidation, exchange of shares, recapitalization, reorganization,
as a result of which the Company’s common stock shall be changed into another class or classes of stock of the Company or another
entity, or in the case of the sale of all or substantially all of the assets of the Company other than a complete liquidation of the
Company. Within the first 180 days after the issuance date, the Company may, at its discretion, redeem the notes for 115% of their face
value plus accrued interest. The Company is obligated to issue warrants that accompany the convertible notes and provide 50% warrant
coverage. The warrants have a 3-year term from date of issuance and an exercise price that is $6.36 per share for 100,000 warrant shares
and $9.0 per share for 35,417 warrant shares.
 
Net
proceeds to the Company from convertible note issuances to March 31, 2021 amounted to $1,240,000 after the original issuance discount
as well as payment of the financing related fees. The Company determined that the conversion and redemption features contained in the
Series B Notes represented a single compound derivative liability that meets the requirements for liability classification under ASC
815. The Company accounted for these obligations by determining the fair value of the related derivative liability associated with the
embedded conversion and redemption features.
 

F-20
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
The
Company recognized debt issuance costs in the amount of $10,000 and treated these as a deduction from the convertible note liabilities
directly, as a contra-liability, and amortized the debt issuance cost over the term of the Series B Notes. The Company recognized initial
debt discount in the amount of $1,312,500 and accreted the interest over the remaining lives of those notes. The debt issuance costs
were fully amortized by March 31, 2022.
 
During
the year ended March 31, 2022, $472,500 (face value) of Series B Notes were converted into 34,586 common shares. As at March 31, 2022,
$840,000 of Series B Notes remained unconverted and outstanding, which was equal to the face value of the relevant convertible notes.
 
During
the year ended March 31, 2023, $555,600 (face value) of Series B Notes were converted into 126,833 common shares (Note 9 d).
 
During the year ended March 31, 2023, $126,680 (face value) of Series B Notes were redeemed by cash payment of $145,682. The redemption
price was determined in accordance to the Series B note agreement, where the Company has an option to redeem the note at 115% of its principal
value instead of converting the note upon receipt of a conversion notice. The difference between the redemption cash payment and the book
value of the note redeemed, including the derivative liability associated to the note, was $24,408, and was recognized as a gain upon
convertible note repayment.
 
During
the year ended March 31, 2024, the Company redeemed $135,710 of Series B Notes, through a cash payment of $162,851. A gain on redemption
$18,540 was recognized as a result of this redemption, representing the difference between the cash payment and the face value of Series
B Notes redeemed net of the related derivative liabilities ($45,681 for the year ended March 31, 2024).
 
In
total, the Company had issued $821,500 and $157,720 for Series A and Series B notes, respectively, out of which $821,500 and $22,010
for Series A Notes and Series B Notes remaining outstanding beyond their contractual maturity date as of March 31, 2024. As at March
31, 2023, $200,000 and $157,720 for Series A and Series B notes remained outstanding beyond their contractual maturity date.
 
The
Series A and Series B notes continued to accrue interest, and no repayment demand notification was received from noteholders, notwithstanding
the fact that these noteholders have continued to convert portions of these notes subsequently; and it is management’s expectation
that all of these notes will eventually convert. In connection with the foregoing, the Company relied upon the exemption from registration
provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.
 
As
of March 31, 2024, and March 31, 2023, the Company recorded accrued interest in the amount of $88,602 and $84,863, respectively, related
to the Series B Notes.
 
During
the years ended March 31, 2024, and March 31, 2023, the Company recognized interest expense in the amount of $3,739 and $7,886, respectively.
 
Series
C Convertible Notes
 
As
of March 31, 2024, the Company has issued Series C Notes in total of $1,812,700
(face value), out of which $590,000
(face value) of such convertible promissory notes were issued during the three months ended March 31, 2023.
 
The
Series C Notes were sold under subscription agreements to accredited investors. The Notes mature one year from the final closing date
of the offering and accrue interest at 15% per annum.
 
For
Series C Notes, commencing six months following the Issuance Date, and at any time thereafter, at the sole election of the Holder, any
amount of the outstanding principal and accrued interest of this note (the “Conversion Amount”) could be converted into that
number of shares of Common Stock equal to: the Conversion Amount divided by the “Optional Conversion Price”, which is defined
as lower of (i) seventy-five percent (75%) of the VWAP for the five (5) Trading Days prior to the Conversion Date, or (ii) eighty percent
(80%) of the gross sale price per share of Common Stock (or conversion or exercise price per share of Common Stock of any Common Stock
Equivalents) sold in a Qualified Financing.
 

F-21
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
For
Series C Notes, “Mandatory Conversion” of the notes would convert into common stock at the applicable “Mandatory Conversion
Price”, if either (i) on each of any twenty (20) consecutive Trading Days (the “Measurement Period”) (A) the closing
price of the Common Stock on the applicable Trading Market is at least $18.00 per share and (B) the dollar value of average daily trades
of the Common Stock on the applicable Trading Market is at least $400,000 per Trading Day; or (ii) upon the closing of a Qualified Financing,
provided that the dollar value of average daily trades of the Common Stock on the applicable National Exchange on each of the ten (10)
consecutive Trading Days following such closing is at least $400,000 per Trading Day. Mandatory Conversion Price means, in the case of
a Mandatory Conversion under situation (i) above, seventy percent (70%) of the VWAP over the Measurement Period, or in the case of a
Mandatory Conversion under situation (ii) above, eighty percent (80%) of the gross sale price per share of Common Stock (or conversion
or exercise price per share of Common Stock of any Common Stock Equivalents) sold in a Qualified Financing.
 
The
Company was obligated to issue warrants that accompany the convertible notes and provide 100% warrant coverage. The warrants have a 4-year
term from date of issuance and an exercise price that is 200% of the 5-day volume weighted average price of the Company’s common
shares at the time of final closing.
 
The
Company was obligated to pay the placement agent of the first series of Series C Notes a 10% cash fee for the face value of the notes.
 
The
Company was also obligated to issue warrants to the placement agent that have a 10-year term and cover 8% of face value of the notes,
with an exercise price that equals to the 5-day volume weighted average price of the Company’s common shares at the time final
closing.
 
Net
proceeds to the Company from Series C Notes issuance up to March 31, 2024 amounted to $1,100,430 after payment of the relevant financing
related fees.
 
Prior
to the final closing date (October 23, 2023), the Company determined that the conversion features contained in those Note, as well
as the obligations to issue investor warrants and placement agent warrants represented a single compound derivative liability that
meets the requirements for liability classification under ASC 815. The Company accounted for these obligations by determining the
fair value of the related derivative liabilities associated with the embedded conversion features, as well as the obligations
related to investor warrant and placement agent warrant issuance. Subsequently, the exercise price of all warrants was concluded and
locked to $4.18 and
$2.09,
respectively, for the note holder and placement agent warrants, as of the final closing date October 23, 2023. Since the exercise
price was no longer a variable, the Company concluded that the noteholder and placement agent warrants should no longer be accounted
for as a derivative liability in accordance with ASC 815 guidelines related to equity indexation and classification. The derivative
liabilities related to those warrants were therefore marked to market as of October 23, 2023 and then transferred to equity
(collectively, “End of warrants derivative treatment”) in the amount of $1,278,786
(Note 8). 
 
For
the Series C Notes, the Company recognized debt issuance costs of $207,361
during the year ended March 31, 2024 and treated these as debt discounts. The Company also recognized additional debt discount in
the amount of $1,005,829
in connection with the recognition of derivative liabilities for the conversion features, investor warrants and placement agent
warrants. The debt discounts are recorded as a contra liability against the convertible note and are amortized and recognized as
accretion expenses using the effective interest method over the remaining lives of the Notes. Since total debt discount amount
cannot exceed total gross proceeds upon issuance, the Company recognized accretion expenses up front of $134,013
and $184,417 during the years ended March 31, 2024, and March 31, 2023, respectively.
 
During
the year ended March 31, 2024, and March 31, 2023 the Company recognized discount amortization of $693,518 and $195,828, respectively,
on Series C Notes as accretion and amortization expense. As of March 31, 2024 and March 31, 2023, the remaining unamortized discount
on Series C convertible notes was $1,232,274 and $578,589, respectively.
 

F-22
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
As
of March 31, 2024, and March 31, 2023, the Company recorded accrued interest in the amount of $253,643 and $2,598, respectively, related
to the Series C Notes.
 
During
the years ended March 31, 2024, and March 31, 2023, the Company recognized interest expense in the amounts of $251,045 and $2,598, respectively.
 
Other
Convertible Notes
 
On
January 23, 2023, the Company issued $2,000,000 (face value) in convertible preferred notes (“the Notes”) to an accredited
investor. The Notes mature 18 months from the issuance date. This note bears interest rate at a fixed rate of 10% in the form of stock
with a striker price equal to the closing stock price on the note issuance date. Therefore, the Company issued 45,045 units of common
stock in lieu of interest on this convertible note. These stocks were valued at $221,621 and was recognized as a deferred cost on the
convertible note, recorded as a contra liability against the convertible note, and was amortized and recognized as accretion expense
using the effective interest rate method over the remaining lives of the Notes.
 
The
conversion of the Notes is automatic upon a Qualified Financing which is in the control of the Company, or at maturity of the notes,
upon mutual agreement by the noteholder and the Company. Since the conversion is not in control of the holder of the note, the Company
did not recognize a derivative liability in connection with the conversion option of the Notes.
 
As
of March 31, 2024, the discount on Other Convertible Notes was fully amortized. As of March 31, 2023, the remaining unamortized
discount on Other Convertible Notes was $186,404.
 
During
the year ended March 31, 2024, and March 31, 2023 the Company recognized discount amortization of $186,404 and $35,217, respectively,
on the Notes as accretion and amortization expense.
 
Convertible
Preferred Notes
 
The
Company entered into a convertible preferred note financing on September 25, 2023 and issued a convertible note (“Preferred Note”)
for a principal amount of $1,000,000.
The Preferred Note matures on the eighteen (18) month anniversary of the issuance date, or if there be more than one closing pursuant
to a qualified offering as defined in the financing agreement, the eighteen (18) month anniversary of the last closing date of the offering
(the “Maturity Date”). The Preferred Note bears interest at a fixed rate of 12%
which is payable in cash monthly.
 
The
Company also entered into a convertible preferred note financing on October 25, 2023 and issued a convertible note (“Preferred
Note”) for a principal amount of $250,000. The Preferred Note matures on the eighteen (18) month anniversary of the issuance date,
or if there be more than one closing pursuant to a qualified offering as defined in the financing agreement, the eighteen (18) month
anniversary of the last closing date of the offering (the “Maturity Date”). The Preferred Note bears interest at a fixed
rate of 12% which is payable in cash monthly.
 
The
Company entered into a convertible preferred note financing on January 9, 2024 and issued a convertible note (“Preferred Note”)
for a principal amount of $114,303. The Preferred Note matures on the twenty-four (24) month anniversary of the issuance date, or if
there be more than one closing pursuant to a qualified offering as defined in the financing agreement, the twenty-four (24) month anniversary
of the last closing date of the offering (the “Maturity Date”). The Preferred Note bears interest at a fixed rate of 8% which
is payable in cash quarterly.
 
The
conversion of the Preferred Notes is automatic upon a Qualified Financing which is in the control of the Company, or at maturity of the
notes, upon mutual agreement by the noteholder and the Company. Since the conversion is not in control of the holder of the note, the
Company did not recognize a derivative liability in connection with the conversion option of the Other Convertible Notes.
 
The
Company may prepay the Preferred Note in whole or in part, after providing fifteen (15) days written notice to the holder, either in
cash or by the mutually consented conversion of the Preferred Note and any accrued interest thereon at a 15% discount to the stock’s
10-day VWAP.
 
As
of March 31, 2024  , the Company recorded accrued interest in the amount of $4,103 related to the Preferred Notes.
 
During
the year ended March 31, 2024, the Company recognized interest expense in the amount of $74,851.
 

F-23
 


 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Other
Short-term loans and Promissory Notes
 
In
December 2022, the Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced
gross proceeds of $400,000, prior to the deduction of issuance costs in the amount of $9,999. The issuance costs were recognized as a
debt discount and amortized via the effective interest method. The term of the finance agreement is 40 weeks. The Company is required
to make weekly payments of $13,995 ($560,000 in the aggregate). As of March 31, 2024, the principal was fully repaid and discount for
this loan was fully amortized. The discount amortization during the years ended March 31, 2024, and March 31, 2023 was $6,142 and $3,857,
respectively, and was recognized as part of the accretion and amortization expenses. In addition, the Company recognized $66,213 and
$93,787 accretion expenses, during the years ended March 31, 2024, and March 31, 2023, respectively, related to the increase in present
value of the loan over its term. For the year ended March 31, 2024, total repayments for the loan amounted to $341,675.
 
In
December 2022, the Company also entered into a short-term collateralized bridge loan agreement with a finance company that advanced gross
proceeds of $800,000, prior to the deduction of issuance costs in the amount of $32,000. The issuance costs were recognized as a debt
discount and amortized via the effective interest method. The term of this second agreement is 40 weeks. The Company is required to make
weekly payments of $29,556 ($13,999 for the first four weeks, and $1,120,000 in the aggregate). As of March 31, 2024, the principal was
fully repaid and discount for this loan was fully amortized. The discount amortization during years ended March 31, 2024, and March 31,
2023, was $20,800 and $11,200, respectively, which was recognized as part of the accretion and amortization expenses. In addition, the
Company recognized $148,027 and $171,973 accretion expenses, during the years ended March 31, 2024, and March 31, 2023, respectively,
related to the increase in present value of the loan over its term. As of March 31, 2024, total repayments for the loan amounted to $768,445.
 
In
December 2022, the Company entered into a promissory note agreement with an individual investor that resulted in gross proceeds of $600,000
(the “Principal Amount”). The note has a fixed rate of interest at 25% per annum payable monthly on the first day of every
month. This promissory note matured on December 15, 2023, when the Principal Amount became due. The note has various default provisions
which would, if triggered, result in the acceleration of the Principal Amount plus any accrued and unpaid interest. The note also has
a 3% early payment penalty provision. As of March 31, 2024, and March 31, 2023, the amount of principal outstanding on the note was $600,000,
and accrued interest outstanding on the note was $12,723 and $12,312, respectively. The note continues to accrue interest, and no repayment
demand notification was received from noteholder. During the years ended March 31, 2024, and March 21, 2023, the Company recorded interest
expense in the amount of $150,411 and $43,562, respectively, related to the promissory note.
 
On
December 30, 2022, the Company extinguished 51,101
warrants that were originally issued to Series A Convertible Noteholders and replaced these warrants with a new promissory note
issued to the same warrant holder. The new promissory note has principal balance of $270,000,
stated interest of zero, and maturity date of December
31, 2023. The fair value of this new promissory note was $248,479
as of the issuance date, which was calculated using a discount rate that was comparable to other loan issuance at the same time as
well as the market bond rates at the time of the promissory note issuance. The difference between the fair value of the new note and
its principal balance was $21,521,
and was recognized as a discount, and amortized via effective interest rate method. The Company compared the fair value of the
extinguished warrants immediately prior to extinguishment against the fair value of the new promissory note issued. As of March 31,
2024, the obligation to repay the principal balance at the original maturity date was waived for a finance charge of $50,000,
which the Company recorded as interest expense in the in the statement of operations. As of March 31, 2024, the amount of principal
outstanding on the note was $270,000,
and the remaining unamortized discount was $Nil.
During years ended March 31, 2024, and March 31, 2023, the Company recognized amortization of discount on this promissory note in
the amounts of $7,304
and $29,460,
respectively, as accretion and amortization expenses. As of March 31, 2024, the Company recorded accrued interest in the amount of
$50,000
related to this promissory note.
 

F-24
 

 
BIOTRICITY
                                            INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
On
March 29, 2023, the Company entered into an additional collateralized bridge loan agreement with a finance company that advanced gross
proceeds of $300,000, prior to the deduction of issuance costs in the amount of $12,000. The issuance costs were recognized as a debt
discount and would be amortized via the effective interest method. The term of this agreement is 40 weeks. The Company is required to
make weekly payments of $5,250 for the first four weeks, and $11,083 for the remaining 36 weeks, which is $420,000 in aggregate. On July
18, 2023, the Company entered into an amendment with the finance company and increased total proceeds borrowed to $700,000. The proceeds
from the amended loan balance were netted against previously outstanding balance of the loan, along with an issuance cost in the amount
of $28,000. The term of this new loan agreement is 40 weeks. The Company is required to make weekly payments of $24,500, which is $980,000
in aggregate. The Company accounted for this amendment as a debt extinguishment and recognized a loss on the amendment of $59,161 in
other expenses. The issuance costs on the amended loan were recognized as a debt discount and would be amortized via the effective interest
method. As of March 31, 2024, the amount of principal outstanding under this amended agreement was $93,848 and the remaining unamortized
issuance cost discount was $2,800. During the year ended March 31, 2024, the Company recognized $29,700 of amortization of discount as
accretion and amortization expenses. In addition, the Company recognized $344,187 accretion expenses, during the year ended March 31,
2024, related to the increase in present value of the loan over its term. As of March 31, 2024, net repayments for the loan amounted
to $543,083.
 
For
the year ended March 31, 2023, net repayments for the above loans and promissory notes amounted to $1,476,121.
 
In
June 2023, the Company entered into a secured revolving account purchase credit and inventory financing facility (the “Revolving
Facility”) with a revolving loan lender, pursuant to which the lender may from time to time purchase certain discrete account receivables
from the Company (with full recourse) or may make loans and provide other financial accommodations, the payment of which are guaranteed
and secured by certain assets of the Company. In
assigning the selling accounts receivables to the revolving loan lender, the Company is receiving 85% of their value as an advance of
its regular collection of those receivables,
limited to $1.2
million in financing, and expects to receive the remaining
balance as part of normal collection activities. The inventory financing provided by this facility was limited to the lower of $0.3
million, or a 40% maximum of inventory balances.
The Revolving Facility was accounted for as a secured borrowing. As of March 31, 2024, the Company had drawn $1,286,792
in accounts receivable financing and $125,000
in inventory financing with aggregate principal
outstanding of $1,411,792.
During the year ended March 31, 2024, the Company recognized interest expense in the amount of $263,696.
As of March 31, 2024, the Company recorded accrued interest in the amount of $23,879
related to the Revolving Facility.
 
On
July 13, 2023, the Company entered into another short-term bridge loan agreement with a collateralized merchant finance company that
advanced gross proceeds of $400,000, prior to the deduction of issuance costs in the amount of $24,000. The issuance costs were recognized
as a debt discount and amortized via the effective interest method. The term of the finance agreement is 14 weeks. The Company is required
to make weekly payments of $38,705 ($540,000 in the aggregate). As of March 31, 2024, the principal was fully repaid and discount for
this loan was fully amortized. The discount amortization during the year ended March 31, 2024 was $24,000 and was recognized as part
of the accretion and amortization expenses. In addition, the Company recognized $141,870 accretion expenses during the year ended March
31, 2024, related to the increase in present value of the loan over its term. As of March 31, 2024, net repayments for the loan amounted
to $158,129.
 
On
August 11, 2023, the Company issued two short term promissory notes (“August 2023 Notes”), each for a principal amount of
$250,000, to one investor for aggregate gross proceeds of $500,000. The August 2023 Notes do not accrue formal interest, but do contain
administrative fees in the aggregate of $75,000. One of the notes matures three months from the issuance date upon which the principal
amount of $250,000 and an administrative fee of $25,000 is due. The second note matures six months from the issuance date upon which
the principal amount of $250,000 and an administrative fee of $50,000 is due. The administrative fees were accrued as interest expenses
for the period of the loans outstanding. As of March 31, 2024, the amount of principal outstanding on the note was $ 427,500, and accrued
interest outstanding on the note was $75,000.
 

F-25
 

 
BIOTRICITY
                                            INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
On
December 8, 2023, the Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced
gross proceeds of $630,000, prior to the deduction of issuance costs in the amount of $15,750. The issuance costs were recognized as
a debt discount and amortized via the effective interest method. The term of the finance agreement is 44 weeks. The Company is required
to make weekly payments of $19,195 ($844,200 in the aggregate). As of March 31, 2024, the amount of principal outstanding under this
amended agreement was $443,185 and the remaining unamortized issuance cost discount was $10,023. During the year ended March 31, 2024,
the Company recognized $5,727 of amortization of discount as accretion and amortization expenses. In addition, the Company recognized
$120,305 accretion expenses during year ended March 31, 2024, related to the increase in present value of the loan over its term. As
of March 31, 2024, total repayments for the loan amounted to $249,535.
 
During
February 2024, the Company entered into a promissory note agreement with an individual investor that resulted in gross proceeds of $660,504
(the “Principal Amount”). The note has a fixed rate of interest at 12% per annum on the principle amount, payable monthly.
As of March 31, 2024, the amount of principal outstanding on the note was $660,504, and accrued interest outstanding on the note was
$7,101. The note continues to accrue interest, and no repayment demand notification was received from noteholder. During the year ended
March 31, 2024, the Company recognized interest expense in the amount of $7,131 related to the promissory note.
 
On
February 2, 2024, the Company entered into a short-term bridge loan agreement with a collateralized merchant finance company that advanced
gross proceeds of $700,000, prior to the deduction of issuance costs in the amount of $35,000. The issuance costs were recognized as
a debt discount and amortized via the effective interest method. The term of the finance agreement is 35 weeks. The Company is required
to make weekly payments of $29,235 ($1,008,000 in the aggregate). As of March 31, 2024, the amount of principal outstanding under this
agreement was $581,105 and the remaining unamortized issuance cost discount was $26,879. During the year ended March 31, 2024, the Company
recognized $8,121 of amortization of discount as accretion and amortization expenses. In addition, the Company recognized $114,985 accretion
expenses during year ended March 31, 2024, related to the increase in present value of the loan over its term. As of March 31, 2024,
total repayments for the loan amounted to $204,645.
 
6.
TERM LOAN AND CREDIT AGREEMENT
 
Term
Loan
 
On
December 21, 2021, the Company entered into a Credit Agreement (“Credit Agreement”) with SWK Funding LLC (“Lender’);
as part of this, the Company has borrowed $12.4
million, with a maturity date of December
21, 2026. The principal will accrue interest
at the LIBOR Rate plus 10.5%
per annum (subject to adjustment as set forth in the Credit Agreement). Interest payments are due on each February, May, August and November
commencing February 15, 2022.
Pursuant to the Credit Agreement, the Company
will be required to make interest only payments for the first 24 months (which may be extended to 36 months under prescribed circumstances),
after which payments will include principal amortization that accommodates a 40% balloon principal payment at maturity. The Company and
the Lender have negotiated the terms under which the Company will be allowed to extend the interest-only period and delay the start of
principal repayment. The terms currently indicate principal repayment of $2.4 million ($600,000 per quarter), during the final two years
of the term. A current portion of the term loan of $2,400,000 was reported in the Company’s current liabilities as of March 31,
2024. Prepayment of amounts owing under the Credit Agreement are allowed under prescribed circumstances.
Pursuant to the Credit Agreement the Company is subject to an Origination Fee in the amount of $120,000.
Upon Termination of the Credit Agreement, the Company shall pay an Exit Fee of $600,000,
along with other fees that may be assessed during the term of the loan. 
 
As
part of the loan transaction, the Company paid legal and professional costs directly in connection to the debt financing in the amount
of $50,000 in cash.
 
Total
costs directly in connection to the debt financing in the amount of $193,437 (professional fee $48,484; lender’s origination fee,
due diligence fee, and other expenses in the amount of $144,953) was deduced from the gross proceeds in the amount of $12,000,000.
 

F-26
 

 
BIOTRICITY
                                            INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
The
Company also repaid $1,574,068 of existing short-term loan and promissory notes and relevant accrued interests by using the proceeds
from the loan.
 
Total
costs directly in connection to the loan and fair value of warrants was in the amount of $1,042,149. And such costs were accounted as
debt discount, and amortized using the effective interest method. The amortization of such debt discount was included in the accretion
and amortization expenses. For the years ended March 31, 2024 and 2023, the amortization of debt discount expense was $206,224 and $202,138
respectively.
 
Total
interest expense on the term loan for the years ended March 31, 2024 and 2023 $1,981,054 and $1,646,903, respectively. During November
2022, the unpaid interest of $364,000 was added to the outstanding principal balance, since then interest onwards would be calculated
on the updated principal balance.
 
The
Company had accrued interest payable of $795,656 and $239,614, respectively, as of March 31, 2024 and March 31, 2023.
 
The
Company and Lender also entered into a Guarantee and Collateral Agreement (“Collateral Agreement”) wherein the Company agreed
to secure the Credit Agreement with all of the Company’s assets. The Company and Lender also entered into an Intellectual Property
Security Agreement dated December 21, 2021 (the “IP Security Agreement”) wherein the Credit Agreement is also secured by
the Company’s right title and interest in the Company’s Intellectual Property.
 
In
connection with the Credit Agreement, the Company issued 57,536 warrants to the Lender, which were fair-valued at $198,713 at issuance
(Note 9). The warrants are accounted as a deduction from liability as well as a credit into additional paid-in capital and amortized
using the effective interest method.
 
At
March 31, 2024, the Company was not in compliance with certain covenants of the term loan, for which it sought and received relief from
the term loan lender.
 
7.
FEDERALLY GUARANTEED LOAN
 
Economic
Injury Disaster Loan (“EIDL”)
 
In
April 2020, the Company received $370,900 from the U.S. Small Business Administration (SBA) under the captioned program. The loan has
a term of 30 years and an interest rate of 3.75% per annum, without the requirement for payment in its first 12 months. The Company may
prepay the loan without penalty at will.
 
In
May 2021, the Company received an additional $499,900 from the SBA under the same terms.
 
As
of March 31, 2024, the Company recorded accrued interest of $26,497 for the EIDL loan (March 31, 2023: $65,247).
 
Interest
expense on the above loan was $32,744 and $32,654 for the years ended March 31, 2024 and 2023, respectively.
 
8.
DERIVATIVE LIABILITIES
 
The
Company analyzed the compound features of variable conversion and redemption embedded in the preferred shares instrument, for potential
derivative accounting treatment on the basis of ASC 820 (Fair Value in Financial Instruments), ASC 815 (Accounting for Derivative Instruments
and Hedging Activities), Emerging Issues Task Force (“EITF”) Issue No. 00–19 and EITF 07–05, and determined that
the embedded derivatives should be bundled and valued as a single, compound embedded derivative, bifurcated from the underlying equity
instrument, treated as a derivative liability, and measured at fair value.
 SCHEDULE
OF DERIVATIVE LIABILITIES


  
Fiscal
                                            Year 2024 $  
Fiscal
                                            Year 2023 $ 

Derivative liabilities, beginning
    of year 
 759,065  
 352,402 

New issuance [Note 9] 
 964,446  
 - 

Change in fair value of derivatives during
    the year 
 (92,961) 
 459,699 

Reduction due to
    preferred shares redeemed [Note 9] 
 (194,882) 
 (53,036)

Conversion to common shares 
    
   

End of derivative treatment of warrants 
    
   

Convertible note modification 
    
   

Convertible note redemption 
    
   

Derivative liabilities,
    end of year 
 1,435,668  
 759,065 

 

F-27
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
The
lattice methodology was used to value the derivative components, using the following assumptions:
 SCHEDULE
OF DERIVATIVE COMPONENTS VALUATION ASSUMPTIONS


  
Fiscal Year  
Fiscal Year 

  
2024  
2023 

Dividend yield (%) 
 12  
 12 

Risk-free rate for term (%) 
 4.7
                                            – 13.7  
 1.90
                                            – 4.40 

Volatility (%) 
 71.9
                                            – 119.1  
 82.2
                                            – 108.2 

Remaining terms (Years) 
 0.25
                                            – 2.01  
 0.5
                                            – 1.12 

Stock price ($ per share) 
 0.98
                                            – 3.82  
 2.76
                                            – 10.62 

 
In
addition, the Company recorded derivative liabilities related to the conversion and redemption features of the convertible notes, as
well as warrants that were issued in connection with the convertible notes (Note 5). Any noteholder and placement agent warrants that
were issued after the finalization of exercise price was accounted for as equity.
 SCHEDULE
OF DERIVATIVE LIABILITIES


  
Fiscal
                                            Year 2024 $  
Fiscal
                                            Year 2023 $ 

  
   
  

Balance
    beginning of year 
 1,008,216  
 520,747 

New Issuance 
 1,224,932  
 685,417 

Conversion to common shares 
 (45,680) 
 (192,794)

Change in fair value of derivative liabilities 
 83,184  
 24,174 

End of derivative treatment of warrants 
 (1,278,786) 
 - 

Convertible note modification 
 -  
 14,082 

Convertible note redemption 
 -  
 (43,410)

Balance
    end of year 
 991,866  
 1,008,216 

 
The
Monte-Carlo methodology was used to value the convertible note and warrant derivative components, using the following assumptions:
 SCHEDULE
OF DERIVATIVE COMPONENTS VALUATION ASSUMPTIONS


  
Fiscal
    Year  
Fiscal
    Year 

  
2024  
2023 

Risk-free rate for term (%) 
 4.2
                                            – 5.3   
 4.10
                                            – 4.70 

Volatility (%) 
 76.2
                                            – 126.6   
 92.2
                                            – 94.5 

Remaining terms (Years) 
 0.25
                                            – 1.49   
 1.34
                                            – 1.59 

Stock price ($ per share) 
 1.08
                                            – 4.20   
 2.76
                                            – 4.68 

 
9.
STOCKHOLDERS’ DEFICIENCY AND MEZZANINE EQUITY
 


(a)
Authorized
    and Issued Stock

 
As
at March 31, 2024, the Company is authorized to issue 125,000,000 (March 31, 2023 – 125,000,000) shares of common stock ($0.001
par value), and 10,000,000 (March 31, 2023 – 10,000,000) shares of preferred stock ($0.001 par value), 20,000    of
which (March 31, 2023 – 20,000) are designated shares of Series A preferred stock ($0.001 par value) and 600 (March 31, 2023 –
Nil) are designated shares of Series B preferred stock ($0.001 par value).
 

F-28
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
At
March 31, 2024, common shares and shares directly exchangeable into equivalent common shares that were issued and outstanding totaled
9,514,440 (2023 – 8,752,510) shares; these were comprised of 9,353,768 (2023 – 8,508,052) shares of common stock and 160,672
(2023 – 244,458) exchangeable shares. At March 31, 2024, there were 6,304 Series A shares of Preferred Stock that were issued and
outstanding (2023 – 6,304), and there were 180 shares of Series B Preferred Stock that were issued and outstanding (March 31, 2023
– nil). There is also one share of the Special Voting Preferred Stock issued and outstanding held by one holder of record, which
is the Trustee in accordance with the terms of the Trust Agreement and outstanding as at March 31, 2024 and 2023.
 
(b)
Series A Preferred Stock
 
The
number of Series A Preferred Stock issued and outstanding as of March 31, 2024 and 2023 was 6,304.
 
The
Series A Preferred Stock is junior to the Company’s existing undesignated preferred stock, and unless otherwise set forth in the
applicable certificate of designations, shall be junior to any future issuance of preferred stock. The purchase price (the “Purchase
Price”) for the Series A Preferred Stock to date has been $1,000 per share. Except as otherwise expressly required by law, the
Series A Preferred Stock does not have voting rights and does not have any liquidation rights.
 
Preferred
Stock Dividends
 
Dividends
shall be paid at the rate of 12% per annum of the amount of the Series A Preferred Stockholder’s (the “Holder”) Purchase
Price. Dividends shall be paid quarterly unless the Holder and the Company mutually agree to accrue and defer any such dividend.
 
Conversion
 
The
Series A Preferred Stock is convertible into shares of common stock commencing 24 months after the issuance date of the Series A Preferred
Stock. Upon which, on a monthly basis, up to 5% of the aggregate amount of the Purchase Price can be converted (subject to adjustment
for changes in the Holder’s ownership of the underlying Series A Preferred Stock). The conversion price is equal to the greater
of $.001 or a 15% discount to the volume-weighted average price (“VWAP”) of the Company’s common stock five Trading
Days immediately prior to the conversion date (the “Conversion Rate). Additionally, subject to certain provisions, the Holder may
exchange its Series A Preferred Stock into any common stock financing being conducted by the Company at a 15% discount to the pricing
of that financing.
 
Other
Adjustments and Rights
 


 
●
    The Conversion Rate (and shares issuable upon conversion of the Series A Preferred Stock) will be appropriately adjusted to reflect
    stock splits, stock dividends business combinations and similar recapitalization.

 
 

 
●
    The Holders shall be entitled to a proportionate share of certain qualifying distributions on the same basis as if they were holders
    of the Company’s common stock on an as converted basis.

 
Company
Redemption
 
The
Company may redeem all or part of the outstanding Series A Preferred Stock after one year from the date of issuance by paying an amount
equal to the aggregate Purchase Price paid, adjusted for any reduction in Series A Preferred Stock holdings, multiplied by 110% plus
accrued dividends
 
(c)
Series B Preferred Stock and Mezzanine Equity
 
On
September 19, 2023, the Company entered into a security purchase agreement (the “Purchase Agreement”) with an institutional
investor (the “Investor”) for the issuance and sale of 220 shares of the Company’s newly designated Series B Convertible
Preferred Stock, $0.001 par value (the “Series B Preferred Stock”), at a purchase price of $9,091 per share of Preferred
Stock, and after accounted for other issuance related costs, the net proceeds received was in the amount of $1,900,000.
 
During
the three months ended March 31, 2024, a further 110 Series B preferred shares were issued from to be issued preferred shares. The net
proceeds received was in the amount of $925,000.
 
Shares
of Series B Preferred Stock and shares of Common Stock of the Company that are issuable upon conversion of, or as dividends on, the Series
B Preferred Stock were offered and were issued pursuant to the Prospectus Supplement, filed September 19, 2023, to the Prospectus included
in the Company’s Registration Statement on Form S-3 (Registration No. 333-255544) filed with the Securities and Exchange Commission
on April 27, 2021, and declared effective May 4, 2021.
 

F-29
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Pursuant
to the initial Purchase Agreement, on September 19, 2023, the Company filed a certificate of designations of Series B Convertible Preferred
Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 600 shares of the Company’s
shares of Preferred Stock as Series B Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative,
participating, optional or other rights of the Preferred Shares. Each share of Series B Preferred Stock has a stated value of $10,000
per share.
 
The
Series B Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and
winding up of the Company, ranks senior to all capital stock of the Company unless the holders of the majority of the outstanding shares
of Series B Preferred Stock consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series
B Preferred Stock.
 
Holders
of Series B Preferred Stock will be entitled to receive cumulative dividends (“Dividends”), in shares of common stock or
cash on the stated value at an annual rate of 8% (which will increase to 15% if a Triggering Event (as defined in the Certificate of
Designations) occurs. Dividends will be payable upon conversion of the Series B Preferred Stock, upon any redemption, or upon any required
payment upon any Bankruptcy Triggering Event (as defined in the Certificate of Designations).
 
Holders
of Series B Preferred Stock will be entitled to convert shares of Series B Preferred Stock into a number of shares of common stock determined
by dividing the stated value (plus any accrued but unpaid dividends and other amounts due) by the conversion price. The initial conversion
price is $3.50, subject to adjustment in the event the Company sells common stock at a price lower than the then-effective conversion
price. Holders may not convert the Series B Preferred Stock to common stock to the extent such conversion would cause such holder’s
beneficial ownership of common stock to exceed 4.99% of the outstanding common stock. In addition, the Company will not issue shares
of common stock upon conversion of the Series B Preferred Stock in an amount exceeding 19.9% of the outstanding common stock as of the
initial issuance date unless the Company receives shareholder approval for such issuances.
 
Holders
may elect to convert shares of Series B Preferred Stock to common stock at an alternate conversion price equal to 80% (or 70% if the
Company’s common stock is suspended from trading on or delisted from a principal trading market or if the Company has effected
a reverse split of the common stock) of the lowest daily volume weighed average price of the common stock during the Alternate Conversion
Measuring Period (as defined in the Certificate of Designations). In the event the Company receives a conversion notice that elects an
alternate conversion price, the Company may, at its option, elect to satisfy its obligation under such conversion with payment in cash
in an amount equal to 110% of the conversion amount.
 
The
Series B Preferred Stock will automatically convert to common stock upon the 24-month anniversary of the initial issuance date of the
Series B Preferred Stock.
 
At
any time after the earlier of a holder’s receipt of a Triggering Event notice and such holder becoming aware of a Triggering Event
and ending on the 20th trading day after the later of (x) the date such Triggering Event is cured and (y) such holder’s receipt
of a Triggering Event notice, such holder may require the Company to redeem such holder’s shares of Series B Preferred Stock.
 
Upon
any Bankruptcy Triggering Event (as defined in the Certificate of Designations), the Company will be required to immediately redeem all
of the outstanding shares of Series B Preferred Stock.
 
The
Company will have the right at any time to redeem all or any portion of the Series B Preferred Stock then outstanding at a price equal
to 110% of the stated value plus any accrued but unpaid dividends and other amounts due.
 
Holders
of the Series B Preferred Stock will have the right to vote on an as-converted basis with the common stock, subject to the beneficial
ownership limitation set forth in the Certificate of Designations.
 

F-30
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
The
Series B Preferred Stock was accounted for as Mezzanine Equity in accordance with ASC 480 - Distinguishing Liabilities from
Equity and the embedded conversion and redemption features was separated from the host instrument and recognized as derivative
liabilities with change in fair value at each reporting period end recognized in the consolidated statement of operations and
comprehensive loss. (Note 8).
 
During
the three months ended December 31, 2023, 40 Series
B preferred shares and dividends accrued thereon were converted into 612,062 common
shares. As a result of the conversion, the Company reduced the book value of mezzanine equity by $228,727 and reduced its accrued
dividends liability by $16,789.  The
Company also reduced the fair value of derivative liabilities by $119,359 in relation to related to the shares converted. The
Company recognized corresponding credits to common share par value and paid in capital.
 
During
the three months ended March 31, 2024, 25 Series
B preferred shares and dividends accrued thereon were converted into 320,321 to
be issued common shares. As a result of the conversion, the Company reduced the book value of mezzanine equity by $142,. The Company
also reduced the fair value of derivative liabilities related to the shares converted by $ 75,523. The Company recognized corresponding credits
to be issued common shares.  
 
A
roll-forward of activity is presented below for the year ended March 31, 2024:
 SCHEDULE OF SERIES B PREFERRED STOCK FOR MEZZANINE EQUITY


  
2024 

  
$ 

Balance beginning of year
    – March 31 
 — 

Net proceeds received pursuant
    to the issuance of preferred shares 
 2,825,000 

Recognition of derivative liabilities (Note
    8) 
 (964,446)

Conversion into common
    shares 
 (371,634)

Balance
    end of year – March 31 
 1,488,920 

 
(d)
Share issuances
 
Share
issuances during the year ended March 31, 2024
 
The
Company sold 36,897 common shares through use of its registration statement, for gross proceeds of $123,347, raising a net amount of
$119,285 after paying for a 3% placement fee and other issuance expenses. In addition, 20,846 shares of common stock were issued to existing
holders as a result of make whole provisions associated with the Reverse Split.
 
The
Company issued 92,125 common shares for services received with a fair value of $ 100,755 which was recognized as a general and administrative
expense with a corresponding credit to additional paid-in capital.
 
Share
issuances during the year ended March 31, 2023
 
During
the three months ended June 30, 2022, the Company issued 67,406 common shares in connection with conversion of convertible notes (Note
5). The total amounts of debts settled is in amount of $406,117 that composed of face value of convertible promissory notes in amount
of $302,000 (Note 5), carrying amount of conversion and redemption feature derived from notes in amount of $104,118. The fair value of
the shares issued and to be issued was determined based on the market price upon conversion and was in the amount of $457,025. The difference,
that represented a loss on conversion between amounts of debt settled and fair value of common shares issued, was in the amount of $50,908
and was recorded as loss on conversion of convertible promissory notes in the consolidated statements of operations and comprehensive loss.
 
In
addition, during the three months ended June 30, 2022, the Company removed 6,683 of previously to be issued shares, in connection with
cancellation of warrant exercises from certain warrant holders. In addition, the Company recognized additional 1,966 shares to be issued
for warrant exercise request received but not processed as of quarter end. As a result of the cancellation of to be issued shares, $42,500
was reduced from balance of shares to be issued, and the Company increased the balance of the shares to be issued by $12,500 upon the
warrants exercise.
 

F-31
 

 
BIOTRICITY
                                            INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Lastly,
during the three months ended June 30, 2022, the Company issued 695 common shares for services received, with a fair value of $7,500.
 
During
the three months ended September 30, 2022, the Company issued 19,612
common shares in connection with conversion of convertible notes (Note 5). The total amounts of debts settled is in amount of $135,274
that composed of face value of convertible promissory notes in amount of $100,000
(Note 5), carrying amount of conversion and redemption feature derived from notes in amount of $35,274.
The fair value of the shares issued and to be issued was determined based on the market price upon conversion and was in the amount
of $175,295.
The difference, that represented a loss on conversion, between amounts of debts settled and fair value of common shares issued was
in the amount of $40,020
and was recorded as loss on conversion of convertible promissory notes in the consolidated statements of operations and comprehensive loss.
 
During
the three months ended September 30, 2022, the Company issued 3,796 common shares for services received, with a fair value of $30,287.
 
During
the three months ended December 31, 2022, the Company issued 39,815
common shares in connection with the conversion of convertible notes (Note 5). The total amounts of debts settled is in amount of
$207,002
that composed of face value of convertible promissory notes in amount of $153,600
(Note 5), carrying amount of conversion and redemption feature derived from notes in amount of $53,402.
The fair value of the shares issued and to be issued was determined based on the market price upon conversion and was in the amount
of $211,602.
The difference, that represented a loss on conversion, between amounts of debts settled and fair value of common shares issued was
in the amount of $4,600
and was recorded as loss on conversion of convertible promissory notes in the  consolidated statements of operations and
comprehensive loss.
 
In
addition, the Company issued 17,544 common shares for services received with a fair value of $112,631 which was recognized as a general
and administrative expense with a corresponding credit to additional paid-in capital.
 
During
the three months ended March 31, 2023, the Company issued 372 common shares in connection with a cashless exercise of options. The Company
recognized $1 of common shares and debited additional paid in capital for $2.
 
In
addition, the Company issued 45,043 common shares in lieu of interest payment for a new convertible note (Note 5). The fair value of
the shares issued was $221,351, which was determined based on closing stock price on the date of share issuance approval. The fair value
of shares issued was recognized as a deferred cost, a contra liability to convertible notes, with a corresponding credit to additional
paid in capital.
 

F-32
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
(e)
Shares to be issued  
 
During
the year ended March 31, 2024, the Company recorded 320,321
common shares to be issued to Series B preference
shareholders for the conversion of 25
preferred shares, in the amount of $228,786. The Company also recorded 20,000
shares to be issued for services in the amount
of $15,280.
 
During
the year ended March 31, 2023, the Company issued 16,683 shares in satisfaction of its obligation of shares to be issued, and moved
$77,300 out of the shares to be issued account into the additional paid in capital account. As at March 31, 2023, the Company has 23,723
outstanding shares remaining to be issued in connection with warrant exercises in prior fiscal year.
 
(f)
Warrant issuances, exercises and other activity  
 
Warrant
issuances during the year ended March 31, 2024
 
During
the year ended March 31, 2024, the Company issued 868,098
note holder warrants and 69,062
placement agent warrants related to the final
closing of Series C convertible notes (Note 5). These warrants relate to Series C Convertible Notes. Prior to the final closing date
(October 23, 2023) of Series C Convertible Notes, the Company determined that the obligations to issue note holder warrants and placement
agent warrants represented a derivative liability that meets the requirements for liability classification under ASC 815. The Company
accounted for these obligations by determining the fair value of the related derivative liabilities. Subsequently, the exercise price
of all warrants was concluded and locked to $4.18
and $2.09,
respectively, for the note holder and placement agent warrants, as of the final closing date October 23, 2023. Since the exercise price
was no longer a variable, the Company concluded that the note holder and placement agent warrants should no longer be accounted for as
a derivative liability in accordance with ASC 815 guidelines related to equity indexation and classification. The derivative liabilities
related to those warrants were therefore marked to market as of October 23, 2023 and then transferred to equity (collectively, “End
of warrants derivative treatment”). The warrants were therefore recognized with a reduction of $1,278,786
against the derivative liability and a corresponding
credit against paid in capital.
 
Warrant
exercises and issuances during the year ended March 31, 2023
 
During
the three months ended June 30, 2022, the Company issued 8,972 warrants as compensation to an executive of the Company who was not part
of the Company stock options plan. The warrant expenses were fair-valued at $77,414, and recognized as general and administrative expenses,
with a corresponding credit to additional paid-in capital.
 
During
the three months ended September 30, 2022, the Company issued 19,714 warrants as compensation to an executive of the Company who was
not part of the Company stock options plan. The warrant expenses were fair-valued at $77,332, and recognized as general and administrative
expenses, with a corresponding credit to additional paid-in capital.
 
During
the three months ended December 31, 2022, the Company issued 36,463 warrants as compensation to an executive of the Company who was not
part of the Company stock options plan. The fair value of the warrants at issuance was $77,780 and was recognized as a general and administrative
expense, with a corresponding credit to additional paid-in capital. In addition, the Company added 52,083 warrants to its outstanding
warrant schedule in connection with warrants issued to Series B convertible note holders. This has no impact on paid-in capital as the
fair value of warrants was already accounted for as part of the original Series B convertible note issuance accounting entries. Lastly,
the Company extinguished and exchanged 51,101 warrants for promissory notes [Note 5] that resulted in an adjustment to additional paid-in
capital in the amount of $71,768.
 

F-33
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
Warrant
issuances, exercises and expirations or cancellations during the fiscal years ended March 31, 2024 and 2023 as follows:
 
Warrant
activity during the years ended March 31, 2024 and 2023 is indicated below:
 SCHEDULE OF WARRANTS OUTSTANDING



  
Broker
    Warrants  
Consultant
    and Noteholder Warrants  
Warrants
    Issued on Convertible Notes  
Total 

As at March 31, 2022 
 146,054  
 300,456  
 1,202,006  
 1,648,516 

Expired/cancelled 
 (6,189) 
 (86,264) 
 (260,663) 
 (353,116)

Exercised 
 —  
 —  
 (53,066) 
 (53,066)

Issued 
 —  
 65,149  
 —  
 65,149 

As at March 31, 2023 
 139,865  
 279,341  
 888,277  
 1,307,483 

Warrants outstanding, beginning balance 
 139,865  
 279,341  
 888,277  
 1,307,483 

Expired/cancelled 
 —  
 (25,347) 
 (888,277) 
 (913,624)

Issued 
 69,062  
 —   
 868,098  
 937,160 

As at March 31, 2024 
 208,927  
 253,994  
 868,098  
 1,331,019 

Warrants
    outstanding, ending balance 
 208,927  
 253,994  
 868,098  
 1,331,019 

Exercise Price 
 $
                                            2.09 to $22.50  
 $
                                            2.69 to $14.40  
$4.18  
   

Expiration Date 
 August
                                            2026 to October 2033  
 March
                                            2029 to Dec 2032  
 October
                                            2027  
   


 
(g)
Stock-based compensation
 
2016
Equity Incentive Plan
 
On
February 2, 2016, the Board of Directors of the Company approved the Company’s 2016 Equity Incentive Plan (the “Plan”).
The purpose of the Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain
and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of
the Company. The Plan seeks to achieve this purpose by providing for awards in the form of options, stock appreciation rights, restricted
stock purchase rights, restricted stock bonuses, restricted stock units, performance shares, performance units and other stock-based
awards.
 

F-34
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
The
Plan shall continue in effect until its termination by the board of directors or committee formed by the board; provided, however, that
all awards shall be granted, if at all, on or before the day immediately preceding the tenth (10th) anniversary of the effective date.
The maximum number of shares of stock that may be issued under the Plan shall be equal to 1,241,422 shares ; provided that the maximum
number of shares of stock that may be issued under the Plan pursuant to awards shall automatically and without any further Company or
shareholder approval, increase on January 1 of each year for not more than 10 years from the effective date, so the number of shares
that may be issued is an amount no greater than 20% of the Company’s outstanding shares of stock and shares of stock underlying
any outstanding exchangeable shares as of such January 1; provided further that no such increase shall be effective if it would violate
any applicable law or stock exchange rule or regulation, or result in adverse tax consequences to the Company or any participant that
would not otherwise result but for the increase.
 
During
the year ended March 31, 2024, the Company granted 7,210 stock options (2023: 298,343 options  ) with a weighted average grant
date exercise price of $2.774 (2023: $6.817). The Company recorded stock-based compensation of $1,025,930 (2023: $647,631) under selling,
general and administrative expenses with corresponding credit to additional paid in capital.
 
The
following table summarizes the stock option activities during the fiscal year ended March 31, 2024:
 SCHEDULE OF STOCK OPTION ACTIVITIES


  
Number
                                            of Options  
Weighted Average Exercise Price  
Weighted
                                            Average Remaining Contractual Term
                                            (years)  
Aggregate Intrinsic Value(1) 

  
   
   
   
  

Outstanding at March 31, 2023 
 1,264,890  
$9.29  
 6.30  
$8,185,321 

Adjustment for rounding effect of Reverse Split 
 12,655  
 -  
 -  
 - 

Granted 
 7,210  
$2.77  
 9.01  
 - 

Exercised 
 (374) 
 4.44  
 -  
   

Expired 
 (39,520) 
$3.89  
 3.76  
 - 

Forfeited 
 (5,362) 
$12.30  
 8.85  
 - 

Outstanding at March 31, 2024 
 1,239,873  
$9.39  
 5.35  
$9,705,937 

Vested and expected
    to vest at March 31, 2024 
 1,239,873  
$9.32  
 5.35  
$9,806,024 

Vested and exercisable
    at March 31, 2024 
 1,134,642  
$9.62  
 5.10  
$9,320,582 

 


(1)
The
    aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value
    of our common stock as of March 31, 2024 and fair value of common stock adjusted for the Reverse Split as of March 31, 2023 of $1.48
    and $2.81 per share, respectively.

 
The
following table summarizes the stock option activities during the fiscal year ended March 31, 2023:
 


  
Number
                                            of Options  
Weighted Average Exercise Price  
Weighted
                                            Average Remaining Contractual Term
                                            (years)  
Aggregate Intrinsic Value(1) 

  
   
   
   
  

Outstanding at March 31, 2022 
 1,235,192  
$14.08  
 5.75  
$567,694 

Granted 
 285,657  
$6.60  
 9.95  
 - 

Exercised 
 (374) 
 4.44  
 -  
   

Expired 
 (222,331) 
$30.69  
 4.83  
 - 

Forfeited 
 (33,254) 
$6.50  
 6.86  
 - 

Outstanding at March 31, 2023 
 1,264,890  
$9.29  
 6.30  
$8,185,321 

Vested and expected
    to vest at March 31, 2023 
 1,264,890  
$9.29  
 6.30  
$8,185,321 

Vested and exercisable
    at March 31, 2023 
 960,521  
$10.10  
 5.54  
$1,165,124 

 


(1)
The
    aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value
    of our common stock as of March 31, 2023 and fair value of common stock adjusted for the Reverse Split as of March 31, 2022 of $2.81
    and $13.62 per share, respectively.

 

F-35
 

 
BIOTRICITY
                                            INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
The
fair value of each option granted is estimated at the time of grant using multi-nominal lattice model using the following assumptions,
for each of the respective years ended March 31:
 SCHEDULE OF FAIR VALUE OF OPTION GRANTED USING VALUATION ASSUMPTIONS


  
2024  
2023 

Exercise price ($) 
 2.78  
 2.7
                                            – 13.62 

Risk free interest rate (%) 
 3.85  
 2.20
                                            – 4.40 

Expected term (Years) 
 10.0  
 10.0 

Expected volatility (%) 
 117.1  
 71
                                            – 121.2 

Expected dividend yield (%) 
 0.00  
 0.00 

Fair value of option ($) 
 2.3  
 2.16
                                            – 11.97 

Expected forfeiture (attrition) rate (%) 
 0.00  
 0.00 

 
2023
Equity Incentive Plan and the Employee Stock Purchase Plans
 
On
March 31, 2023, the Company adopted the 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan authorizes grants of
equity-based and incentive cash awards to eligible participants designated by the 2023 Plan’s administrator. The 2023 Plan will
be administered by the Compensation Committee of the Company’s Board of Directors (the “Board”). An aggregate of 5,000,000
shares of the Company’s common stock (the
“Common Stock”), plus the number of shares available for issuance under the Company’s 2016 Equity Incentive Plan that
had not been made subject to outstanding awards, were reserved for issuance under the 2023 Plan. Unless earlier terminated by the Board,
the 2023 Plan will remain in effect until all Common Stock reserved for issuance has been issued, provided, however, that all awards
shall be granted, if at all, on or before the day immediately preceding the tenth (10th) anniversary of the effective date of the 2023
Plan.
 
The
Company also adopted the Employee Stock Purchase Plan (the “ESPP”). The ESPP allows eligible employees of the Company and
the Company’s designated subsidiaries the ability to purchase shares of the Company’s Common Stock at a discount, subject
to various limitations. Under the ESPP, employees will be granted the right to purchase Common Stock at a discount during a series of
successive offerings, the duration and timing of which will be determined by the ESPP administrator (the “Administrator”).
In no event can any single offering period be longer than 27 months. The purchase price (the “Purchase Price”) for each offering
will be established by the Administrator. With respect to an offering under Section 423 of the Internal Revenue Code of 1986 (“Section
423 Offering”), in no case may such Purchase Price be less than the lesser of (i) an amount equal to 85 percent of the fair market
value on the commencement date, or (ii) an amount not less than 85 percent of the fair market value the on the purchase date. In the
event of financial hardship, an employee may withdraw from the ESPP by providing a request at least 20 Business Days before the end of
the offering period (the “Offering Period”). Otherwise, the employee will be deemed to have exercised the purchase right
in full as of such exercise date. Upon exercise, the employee will purchase the number of whole shares that the participant’s accumulated
payroll deductions will buy at the Purchase Price. If an employee wants to decrease the rate of contribution, the employee must make
a request at least 20 Business Days before the end of an Offering Period (or such earlier date as determined by the Administrator). An
employee may not transfer any rights under the ESPP other than by will or the laws of descent and distribution. During a participant’s
lifetime, purchase rights under the ESPP shall be exercisable only by the participant.
 
There
were no issuances under either the 2023 Plan or the ESPP as of March 31, 2024 and 2023.
 

F-36
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
10.
INCOME TAXES
 
Income
taxes
 
The
provision for income taxes differs from that computed at combined corporate tax rate of approximately 26% as follows:
 
Income
tax recovery
 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION


  
Year
                                            ended March
                                            31, 2024  
Year
                                            ended March
                                            31, 2023 

  
$  
$ 

Net loss 
 (14,094,283) 
 (18,658,143)

  
    
   

Expected income tax recovery 
 (3,664,514) 
 (4,851,117)

Non-deductible expenses 
 882,745  
 648,813 

Other temporary differences 
 (4,160) 
 (4,160)

Change in valuation
    allowance 
 2,785,929  
 4,206,464 

Income tax recovery 
 —  
 — 

 
Deferred
tax assets
 SCHEDULE OF DEFERRED TAX ASSETS


  
As
    at  March 31, 2024  
As
    at  March 31, 2023 

  
$  
$ 

Non-capital loss carry forwards 
 18,211,344  
 15,421,255 

Other temporary differences 
 7,963  
 12,123 

Valuation allowance 
 (18,219,307) 
 (15,433,378)

Deferred tax assets 
 —  
 — 

 
As
of March 31, 2024 and 2023, the Company decided that a valuation allowance relating to the above deferred tax assets of the Company was
necessary, largely based on the negative evidence represented by losses incurred and a determination that it is not more likely than
not to realize these assets, such that, a corresponding valuation allowance, for each respective period, was recorded to offset deferred
tax assets.
 
As
of March 31, 2024 and 2023, the Company has approximately $70,043,631 and $59,312,517 , respectively, of non-capital losses available
to offset future taxable income. These losses will expire between 2035 to 2039.
 
As
of March 31, 2024, and 2023 the Company was not subject to any uncertain tax positions.
 
11.
COMMITMENTS AND CONTINGENCIES
 
There
are no claims against the Company that were assessed as significant, which were outstanding as at March 31, 2024 and, consequently, no
provision for such has been recognized in the consolidated financial statements.
 

F-37
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
12.
OPERATING LEASE RIGHT-OF-USE ASSETS AND LEASE OBLIGATIONS
 
The
Company has one operating lease primarily for office and administration.
 
During
December 2021, the Company entered into a new lease agreement. The Company paid $85,000 deposit that would be returned at the end of
the lease. In December 2022, the Company started a new lease with an additional suite in the same premise as the existing lease.
 
When
measuring the lease obligations, the Company discounted lease payments using its incremental borrowing rate. The weighted-average-rate
applied is 11.4%.
 SCHEDULE OF OPERATING LEASES OBLIGATIONS


  
2024  
2023 

Right of
    Use Asset 
$  
$ 

Beginning balance at March 31 
 1,587,492  
 1,242,700 

New leases 
 -  
 685,099 

Amortization 
 (365,899) 
 (340,307)

Ending balance at March 31 
 1,221,593  
 1,587,492 

 


  
2024  
2023 

Lease Liability 
$  
$ 

Beginning balance at March 31 
 1,722,095  
 1,330,338 

New leases 
 -  
 685,099 

Repayment and interest
    accretion 
 (335,609) 
 (293,342)

Ending balance at March 31 
 1,386,486  
 1,722,095 

  
    
   

Current portion of operating lease liability 
 457,371  
 335,608 

Noncurrent portion of operating lease liability 
 929,115  
 1,386,487 

 
The
operating lease expense was $564,167
for the year ended March 31, 2024 (2023: $405,496)
and included in the selling, general and administrative expenses. Operating cash flows from operating leases amounted to
$509,041
and $341,558 during the years ended March 31, 2024 and March 31, 2023, respectively.
 
The
following table represents the contractual undiscounted cash flows for lease obligations as at March 31, 2024:
 SCHEDULE OF CONTRACTUAL UNDISCOUNTED CASH FLOWS FOR LEASE OBLIGATION


Calendar
    year 
$ 

2024 
 552,293 

2025 
 600,288 

2026 
 565,359 

2027 and beyond 
 - 

Total undiscounted lease liability 
 1,717,940 

Less imputed interest 
 (331,454)

Total 
 1,386,486 

 

F-38
 

 
BIOTRICITY
INC.
Notes
to Consolidated Financial Statements
Years
ended March 31, 2024 and 2023
(Expressed
in US Dollars)
 
13.
PROPERTY AND EQUIPMENT
 
During
the year-ended March 31, 2022, the Company purchased leasehold improvements of $12,928
(useful life: 5
years) as well as furniture & fixtures of $16,839
(useful life: 5
years). There were no
purchases of property and equipment during the fiscal years ended March 31, 2024 , and March 31, 2023. The Company recognized depreciation expense for
these assets in the amount of $5,953
during the years ended March 31, 2024 and 2023.
 SCHEDULE OF PROPERTY AND EQUIPMENT


Cost 
Office
    equipment  
Leasehold
    improvement  
Total 

  
$  
$  
$ 

Balance at March 31, 2022 
 16,839  
 12,928  
 29,767 

Additions 
 —  
 —  
 — 

Balance at March 31, 2023 
 16,839  
 12,928  
 29,767 

Additions 
 —  
 —  
 — 

Balance at March 31,
    2024 
 16,839  
 12,928  
 29,767 

 


Accumulated
    depreciation 
Office
    equipment  
Leasehold
    improvement  
Total 

  
$  
$  
$ 

Balance at March 31, 2022 
 1,308  
 1,000  
 2,308 

Additions 
 3,367  
 2,586  
 5,953 

Balance at March 31, 2023 
 4,675  
 3,587  
 8,262 

Additions 
 3,367  
 2,586  
 5,953 

Balance at March 31,
    2024 
 8,042  
 6,173  
 14,215 

  
    
    
   

Net book value 
    
    
   

Balance at March 31, 2023 
 12,164  
 9,432  
 21,506 

Balance at March 31,
    2024 
 8,797  
 6,755  
 15,552 

 
14.
SUBSEQUENT EVENTS
 
During
the period from April 1 to June 25, 2024, the following events occurred:
 


 
●
The Company issued 110 Series B preferred shares valued at
    $1.1 million
    (face value), for net proceeds of $867,532 after
    issuance discounts and transaction fees. It also issued a further 55 Series B preferred shares valued at $550,000 (face
    value, for net proceeds of $445,000,
    in a separate transaction.

 
●
The Company issued 320,321
common shares to Series B preferred shareholders in relation to shares to be issued obligation as of March 2024 for Series B preferred
share conversions. During May 2024, the Company issued another 287,458
common shares to Series B preferred shareholders for an additional request to convert 25
Series B preferred shares.

 
●
The Company issued 1,344,709
common shares to Series C convertible note holders upon receiving conversion requests for $1,177,700
(face value) of Series C convertible notes. 

 
●
The Company issued 8,952,170
common shares upon conversion of 6,104
Series A preferred shares and the respective accrued dividends, thereon.

 
●
The Company issued 1,000,413 common shares in settlement
    of $741,316 in accounts payable. The Company also issued 40,000 common
    shares to a vendor as compensation for consulting services.

 
●
The Company raised $125,227
from the sale of 97,811
shares, pursuant to a registration statement filed on May 15, 2024. 

 

F-39





 
 


